While buying strong companies on strength is generally a good idea, figuring out solid bets in the options game is not quite so clear-cut. That’s why I have my Power Options system to run multiple regression analysis and other statistical tools that unearth the few stocks that are building momentum and set to make a quick burst.
Since the market appears to have paused to refresh, one of the best ways to put your money to work is with call options in Olin Corp. (NYSE:OLN), a chemical manufacturing company. My computer system rates this stock as a “reestablished buy,” which means that this stock has confirmed its upward trend after a temporary pullback. Such a bounceback is one of the most reliable signals that the stock will rise again quickly.
Recommendation: Buy OLN Aug 25 call options at $1.60 or lower, when the stock price is around $25.70. After entry, take profits if the stock price hits $27.00 or the option price reaches $2.50. Exit if the stock price closes below $25.00 or the option price falls to $1.20.
Join us Tuesday, April 23, at 4:30 p.m. ET for a live event with Ken Trester: Use Underpriced Options to Supercharge Your Profits. Register for free now!
InvestorPlace advisor Ken Trester has launched Power Options Weekly. This brand new weekly service delivers 5 new trades 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.