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Trade of the Day: Atmel Corp. (ATML)

This option trade is expected to double in value


As I scan the markets with my Power Stocks program, on occasion certain stocks show such positive quantitative signals, either bearish or bullish, that I search through the options chain to find an undervalued put or call to play the move.

This week, Atmel Corp. (ATML) fit the bill. It’s a company with a sizeable intellectual property portfolio that produces microcontrollers and touch-screen components. It’s a powerhouse among the stocks that I follow, with 20% gains year-to-date and a volatile trading pattern that could lead to the kind of big spikes that lead to even bigger percentage moves in options.

Recommendation: Buy ATML July 8 call options at 50 cents or lower. After entry, take profits if the stock price hits $8.80 or the option price reaches $1.00. Exit if the stock price closes below $7.50 or the option price falls to 30 cents.

InvestorPlace advisor Ken Trester has launched Power Options Weekly. This brand new weekly service delivers 5 new trades to you each Friday. It’s the perfect ‘bridge’ between investing in ordinary stocks and the turbocharged world of options trading. 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. Try Power Options Weekly today and receive 2 weeks for the price of 1 for only $19.95.

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