With the bargain-crazy masses retreating from the local Wal-Marts (NYSE:WMT) and Apple (NASDAQ:AAPL) Stores to gloat over their midnight deals and soak their feet, another contingent of American shoppers will take to the keyboard and begin the frenzy of Cyber Monday.
Just as my scans unveiled a call options trade and a put option trade for Black Friday, let’s kick off Cyber Monday with two more retail options trades.
The long-side pick my system presented was Lowe’s (NYSE:LOW), a chain of home improvement retailers, similar to Home Depot (NYSE:HD), although Lowe’s customer service practices and legion of helpful staff members tends to cater more toward the home owner as opposed to Home Depots contractor crowd.
Buy the LOW Jan 36 Call options at 66 cents. After entry, take profits if the stock price hits $36.40, or the option price hits $1.50. Cut and run if the stock price closes below $33.70 or the option hits 40 cents.
If you’re looking for other bullish candidates, my scans have designated Amazon (NASDAQ:AMZN), Costco (NASDAQ:COST), Nordstrom (NYSE:JWN) and Nike (NYSE:NKE) as improving. And though I found a better options pick in LOW, my results are that HD is restable and a buy right now.
And for bearish plays, it’s probably no surprise to anyone who follows the retail sector that J.C. Penney (NYSE:JCP) is practically begging to be shorted via puts. But just because it’s a foregone conclusion doesn’t mean there isn’t room to profit from a subsequent decline in JCP.
Buy the JCP Jan 15 Put options at 76 cents or lower. After entry, take profits if JCP stock hits $14.50 or if the put option price hits $1.80. Exit if the stock price closes above $18.70, or the option’s price dips to 50.
In this season of over-consumption where even traders are rushing to make last-minute purchases before year end, make sure you’re a discerning buyer.
Ken Trester is editor of the popular Maximum Options program. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.
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