Trade of the Day: Altria Group Inc (MO)

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Last week’s tech panic sent most of the so-called “FANG” (Facebook Inc (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX) and Alphabet Inc (NASDAQ:GOOGL)) stocks significantly lower in a very rough trading session. This was a stressful event for traders because the top-five big tech performers had accounted for 40% of the S&P 500’s year-to-date gains while only representing 13% of the index.

What is important to watch after a group has lost leadership is whether momentum has merely been “handed off” to some other market segment, or if that leadership is quickly reasserted by the same group.

Meanwhile, the Federal Open Market Committee (FOMC) released its monetary policy statement yesterday, and to the surprise of nobody, raised the Federal Funds rate another 0.25%. It also left in place its expectations for one more rate hike during 2017 (depending on what happens with inflation during the rest of the year). The FOMC also outlined its plan for winding down its balance sheet, a plan it says it will implement later this year.

This news has sent U.S. Treasury yields lower — with the yield on the CBOE Interest Rate 10 Year T Note (INDEXCBOE:TNX) dropping to nearly 2.1% at one point Wednesday — which gives strong dividend-yielding stocks like Altria Group Inc (NYSE:MO) a great opportunity to climb higher.

Trade of the Day: Altria Group Inc (NYSE:MO)

We are looking for MO to climb back up to its March 10 highs near $76.50 during the next few weeks.

‘Buy to open’ the MO July 77.50 Calls (MO170721C00077500) for a maximum price of $0.55.

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.

Most recently, John and Wade are co-options strategists of Turbo Trader Live — a live, interactive trading room service that runs two hours every trading day the market is open. Turbo Trader Live focuses on long call and put options, as well as long and short vertical spread strategies. Find out how to get in on the live trading action and start making real profits by clicking here.


Article printed from InvestorPlace Media, https://investorplace.com/2017/06/trade-of-the-day-altria-group-inc-mo/.

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