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3 Call Contenders: Defense Stocks

All three are bullish bets


Each week I use my Power Stocks scanner to find the best stocks for options trading. The government contractor stocks that caught my attention this week had all of the qualities I look for in a call option—the potential for a big move up (volatility) based on technicals and past activity in the stock, and good liquidity. All of these are names you’ll recognize, and for good reason—options which do not have liquidity may trap you into a position, or prevent you from taking a large enough position to make the transaction worthwhile.

The following stocks have those qualities I look for. I’ll leave it up to you to decide which strike price and month are appropriate for your trading style, but be sure to give yourself enough time to be right. I’ve also included the support and volatility levels my scanner has detected for these stocks. An average volatility is considered to be 20.

  • Boeing (NYSE:BA) is no longer grounded, thanks to the Dreamliner being cleared for flight again. Support for this stock is $84, and it has average volatility, with a rating of 20 from my Power Stock scanner.
  • General Dynamics (NYSE:GD) is soaring too, at $4 above its support level. The stock has volatility rated at 24 so it could make even more of a jump.
  • Northrop Grumman (NYSE:NOC) has begun its uptrend as well, closing at $74.24 on Friday. The stock has support at $69 and low volatility with a rating of 16.

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