High On Drugs
face=”Arial, Helvetica”>Micron Technologies
(
MU |
Quote |
Chart |
News |
PowerRating), on the
From Highs List, may present an opportunity for covered
calls. You can buy the stock for 90 13/16, and you can sell
the August 105 calls for 4. This represents approximately a
20% return (more than 100% annualized, based on 50 days
until expiration) should the stock be called away.
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Although
much of the action could be attributed to Eli Lilly
(
LLY |
Quote |
Chart |
News |
PowerRating),
you can’t ignore the fact that major drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating)
broke to new highs on Thursday. Look for buying
opportunities in calls and call spreads here.
Telecom
(
$XTC.X |
Quote |
Chart |
News |
PowerRating) seemed to find support around the 30%
retracement level of its recent run-up from lows. Look for
buying opportunities in calls and call spreads here, but
wait for additional follow-through to the upside, or focus
on the strongest issues.
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On
the short side, banks
(
$BKX.X |
Quote |
Chart |
News |
PowerRating), mentioned recently,
still look vulnerable. Continue to look for a buying
opportunity here in puts and put spreads.
Going
forward: Unless the semis
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) rally soon, they
could be in trouble.
Best
of luck with your trading on Friday!
P.S. Reminder:
Protective stops on every trade!