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.
- Boeing (BA) shows support at $102, and is currently trading at $106.96. The volatility rating is 20.
- General Dynamics (GD) has shown steady gains since the last time I covered this sector. Its support has risen to $79, and the stock closed at $84.40 Friday with fairly high volatility at 28.
- Lockheed Martin (LMT) has fully confirmed its bullish trend. The stock closed at $115.55 Friday and is showing a $108 support level, with volatility that’s “just right” at 20.
- Northrop Grumman (NOC), today’s Trade of the Day stock, merits both a stock and options buy. It closed Friday at $88.36 and shows resistance at $83, with average volatility at 20.
- United Technologies (UTX) has lower volatility than others in the space, with a rating of 16, but it keeps trucking along. UTX has support at $96 and closed Friday at $102.48.
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