Bitcoin sets a new all-time high above $6,000 >>> READ MORE

Trade of the Day: Target (NYSE:TGT)

Play the decline in retail stocks with these put options


To receive further updates on this Target (NYSE:TGT) trade as well as an alert when it’s time to take profits, sign up for a risk-free trial of Power Options Weekly today.

My indicators are giving pretty strong buy signals this week, and I continue to believe that the market should rally until at least through mid-January.

Earlier this week, I did some research on a market phenomenon called the “January effect,” which occurs when stocks, and especially small-cap stocks, rise during January. While the January effect did not materialize in the last several years, my research showed that over the past 65 years, the market has risen in January roughly 60% of the time, with an average gain of about 2%.

That is a fairly bullish sign, but the retail sector has been struggling to keep up, to say the least. Earnings released by Macy’s (NYSE:M) and Kohl’s (NYSE:KSS) earlier this week showed a weak third quarter for retail companies, which are being severely hurt by online retailers like (NASDAQ:AMZN), while Nordstrom (NYSE:JWN) also fell nearly 10% as the entire sector took a hit.

With that said, today I’m recommending a bearish put option on Target (NYSE:TGT), which is also likely to come under some significant selling pressure over the near term.

Buy to open the Target (TGT) Feb 70 Puts (TGT170217P00070000) at $1.40 or lower.

InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice 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.

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC