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.
- Bank of America (BAC) is trading right around support at $13.43. We’ll see if it pops above even further, but with a volatility rating of 33, I think we’ll see a big spike ahead.
- Citigroup (C) is a powerhouse stock that has already started its uptrend. The stock closed at $51.45 Friday, well above support at $46. Volatility is also well above average at 27.
- JPMorgan Chase (JPM) has been in an upward trend for over a week, and displays good upside characteristics relative to other stocks. It shows support at $49, and closed Friday at $52.30. Volatility for this stock is average at 21.
- American Express (AXP) closed Friday at $73.32, well above support at $68. The stock has volatility slightly below average at 18.
- H&R Block (HRB) is trading slightly above its $28 support at $29.64. Volatility for the stock is high, rated 32.
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