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Trade of the Day: Rowan Cos. (RDC)

Sit back and wait for the ignition to rev up on this trade


Rowan Cos. (NYSE:RDC), a major offshore driller, traded gently higher today as shares continue to emerge ever so gently from their trading range of the past two and a half weeks. The energy sector overall appears to be a mixed bag, but as you can see from RDC’s daily chart, this stock can really move once it gets going.

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The stock is trading just above its 50-day moving average, and it appears ready to launch one of its big advances now, similar to the rally out of a channel like what we saw in January-February of last year.

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With open interest for February $36 call options over 3000,  I’m not the only one anticipating a move up in this stock. It’s been trading just above its 50-day moving average for a while now, and based on its history, I’m seeing a quick spike upward. The company reports earnings on Feb. 25. So just sit back and wait for the ignition to rev up on this trade.

Recommendation: RDC looks great for an entry at current levels and a $37 target.

InvestorPlace advisor Jon Markman operates the investment firm Markman Capital Insight. He also writes a daily swing trading newsletter, Trader’s Advantage which aims to capture profits of 15% to 40% and often as much at 100% to 200% in less than 90 days. 

Professional traders and hedge funds make huge profits off volatility.  Now, Jon’s service CounterPoint Options levels the playing field with the first service geared towards helping individual traders make steady, consistent profits with the VIX.  Get more information on Trader’s Advantage and CounterPoint Options today.

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