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The major indices already recovered a portion of the previous week’s losses, and they may continue upwards heading into April as fund managers put new capital to work. From a technical perspective, the S&P 500 has now retested its February lows and has so far managed to remain above support at the 2,600 level.
The jury is still out as to whether this support will hold this week and confirm a “double-bottom” formation, but the odds are good that we’re going to see a bounce here, and possibly a strong bounce at that.
Meanwhile, the final reading for fourth-quarter GDP in the United States came in at 2.9% on Wednesday, which was above expectations for a reading of 2.7%. Consumer spending posted the largest gain in three years, and that is showing up in the market as well. Some of the retail names have been turning up, so it does appear that consumers have been willing to spend more money recently.
All this being the case, today I am recommending a bullish trade on DSW Inc. (NYSE:DSW):
Buy to open the DSW Jun 25 Calls (DSW180615C00025000) at $0.75 or lower.
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InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. 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.