Major Drugs Higher?

IDEC
Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating)
, mentioned in my Stock Outlook and
on the  Pullbacks
Off Highs List
, appears to be testing support near the area of its recent
breakout (a). The fact that it’s holding suggests that its uptrend remains
intact. This stock may  provide an opportunity for
covered calls. You can buy the stock for 184 3/4 and sell the December 195 calls
for 15 5/8. This represents
approximately a 14% return (more than 110% annualized, based
on 45 days until expiration) should the stock be called
away.

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Major drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating)
and healthcare
(
$HCX.X |
Quote |
Chart |
News |
PowerRating)

look poised to continue their strong uptrends. Look for buying opportunities in
calls and call spreads here.

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On the short side, the semis
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
,
mentioned recently, still look vulnerable. Continue to look for buying opportunities in puts and put spreads
here.

Internet,
basis the Dot
(
$DOT.X |
Quote |
Chart |
News |
PowerRating)
, still looks poised to resume its strong
downtrend. Look for buying opportunities in puts and put spreads here.

Follow
Up

If you have profits in consumer non-durables
(
$CMR.X |
Quote |
Chart |
News |
PowerRating)
,
mentioned recently, you might want to lock in a piece of your profits as they
were up sharply on Monday. Ditto for insurance
(
$IUX.X |
Quote |
Chart |
News |
PowerRating)
.

Best
of luck with your trading on Tuesday!

P.S. Reminder:
Protective stops on every trade!