5 Call Contenders: Defense Stocks

Start your research for next week's call option trades

   

As I was using my Power Stocks scanning program to take a look at the market, internet stocks caught my attention. Several names in this area 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.

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 volatility is considered to be 20.

  • Boeing (BA) is a powerhouse stock, one of the strongest I follow. The stock closed at $98.92 Friday, well above its support level of $89. This stock has an average volatility rating at 22.
  • General Dynamics (GD) has also started its uptrend, and is several dollars above its $72 support at $78.29. It shows volatility above average with a rating of 28.
  • Lockheed Martin (LMT) shows support at $97. The stock closed at $106.41 Friday and has a slightly below-average volatility level at 19.
  • Northrop Grumman (NOC) is also well on its way up—currently at $82.19, with support at $73. This stock has below-average volatility at 18.
  • United Technologies (UTX) closed at $97.35 Friday, well above its $94 support. This stock also has very mild volatility, rated a mere 14.

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