Each week I use my Power Stocks scanner to find the best stocks for options trading. The ones that caught my attention this week had all of the qualities I look for in a call option—the potential for a big move up (volatility) based on technicals and past activity in the stock, and good liquidity. All of these are names you’ll recognize, and for good reason—options which do not have liquidity may trap you into a position, or prevent you from taking a large enough position to make the transaction worthwhile.
The following stocks have those qualities I look for. I’ll leave it up to you to decide which strike price and month are appropriate for your trading style, but be sure to give yourself enough time to be right. I’ve also included the support and volatility levels my scanner has detected for these stocks. An average level of volatility in my system is considered 20.
- Air Products (APD) is well on its way up, with a $104.12 close Friday. That’s 8% above its $96 support level. Volatility for this stock is just slightly below average at 19.
- Tyco Intl. (TYC), on the other hand, has just started its uptrend. Support for this stock is at $34, and Friday TYC closed at $34.59. Volatility is rated 21.
- Dow Chemical (DOW) is a similar story: currently trading at $34.70 with a $34 support level. However, Dow shows fairly high volatility at 28.
- Dupont (DD) shows support at $55, and is currently trading at $57.66 with an average volatility level of 20.
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