Our indicators are giving bullish readings, unchanged from last week. These bullish readings are confirmed by our internal indicators as the 200-day Moving Averages Index, Advance Decline Index and Cumulative Volume Index are all in bullish trends. And volatility readings continue to trend lower. Stocks have been so consistently strong recently that it is hard to identify any solid nearby support should an inevitable pullback occur. For now we will let the index’s 50-day moving averages serve that purpose.
Recommended Fast Options Trade: IDT Corp. (NYSE: IDT)
IDT rallied strongly from November to December before pulling back over the past month. But it has snapped back and broken above resistance and looks like it will move higher.
I recommend that you buy the IDT Mar 30 Call up to $1.90 ($190 per contract).
After taking the position, enter a good-til-cancelled contingent order to sell this option if the stock hits its target price of $31.20. That should give you an option price of about $4.10, for a 115% profit.
Close this position and cut losses if the stock closes below $24.70, when the option price should be about $1.20. The stock is currently trading near $26.95. The computer-simulated probability of this option hitting its target price is 30%.
Recommended Fast Options Trade: A123 Systems (NASDAQ: AONE)
AONE has been in a steady uptrend and has broken above its 200-day moving average and other resistance. It pulled back a little on Thursday but should move higher if stocks continue to rally.
I recommend that you buy the AONE Mar 11 Call up to 70 cents ($70 per contract).
After taking the position, enter a good-til-cancelled contingent order to sell this option if the stock hits its target price of $11.70. That should give you an option price of about $1.50, for a 114% profit.
Close this position and cut losses if the stock closes below $9.60, when the option price should be about 40 cents. The stock is currently trading near $10.35. The computer-simulated probability of this option hitting its target price is 24%.
* All of our short-term recommendations can be taken for up to three days after they are recommended. Make sure the stock and option prices are close to where they were when we made the recommendation. If after three days you still have not gotten the position filled, cancel the order and wait for our new recommendations, as the profit probabilities may no longer be valid.
Action to Take on Current Position: Take-Two Interactive Software (NASDAQ: TTWO)
Continue to hold the TTWO Mar 14 Call. The position reached its three-week holding period Thursday but the stock is showing renewed upside momentum. Raise the stop price for this position to $12.70.
Action to Take on Current Position: Eastman Kodak (NYSE: EK)
Sell-to-close the EK Apr 5.5 Call. We had extended this position’s time frame and it has not fallen to its stop price, but the stock’s momentum looks like it is slowing.
Ken Trester is editor of the popular Maximum Options program. As the nation’s foremost professional options trader, Trester is not just another “options educator.” He is a pro who has been trading options since the first exchanges opened in 1973 with a winning streak that goes all the way back to 1984 and money-doubling average annual profits since 1990.
