Nets Strong / Biotechs Pause
face=”Arial, Helvetica”>For those willing to assume a high
degree of risk, Quest Diagnostics
(
DGX |
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PowerRating), on the
60-Day Highs On Double Volume List, may present an
opportunity for covered calls. You can buy the stock for 74
1/2, and you can sell the August 80 calls for 6 5/8. This
represents approximately a 16% return (more than 90%
annualized, based on 59 days until expiration) should the
stock be called away.
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Major
oils
(
$XOI.X |
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PowerRating) sold off earlier on Tuesday, but found
support near the bottom of their recent high-level
consolidation and reversed to close well. This suggests that
their longer-term uptrend remains intact. Look for a buying
opportunity in calls and call spreads here.
The
Nets
(
$IIX.X |
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PowerRating) appear to be rallying out of a
head-and-shoulders bottom formation. Look for a buying
opportunity in calls and call spreads here.
On
the short side, banks
(
$BKX.X |
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PowerRating) still look poised to
resume their meltdown. Continue to look for buying
opportunities in puts and put spreads here.
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For
the OEX trader, once again, the VIX remains at relatively
low levels. Continue to look for a buying opportunity in
puts and put spreads.
Follow-up:
Biotech
(
$BTK.X |
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PowerRating), mentioned recently, began to stall
out on Tuesday. If you’re not already positioned, you might
want to wait a few days for a pullback/consolidation before
attempting an entry. If you have profits here, you might
want to lock in a piece.
Best
of luck with your trading on Wednesday!
P.S. Reminder:
Protective stops on every trade!