Our indicators are giving bullish readings, the same as last week. These readings are confirmed by our three main internal indicators, the 200-day Moving Averages Index, Advance Decline Index and Cumulative Volume Index, which all are bullish. And volatility readings continue to trend lower.
Recommended Fast Options Trade: McDermott International (NYSE: MDR)
MDR broke out of a trading range at $21 and moved higher, then recently broke above resistance at $22.50 and moved higher still. It should continue rallying if stocks continue their uptrend. Here is the best way to play more strength in McDermott …
Buy the MDR May 26 Call up to $1 ($100 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 $26.20. That should give you an option price of about $2, for a 100% profit.
Close this position and cut losses if the stock closes below $22.90, when the option price should be about 60 cents. The stock is currently trading at $24. The computer-simulated probability of this option hitting its target price is 20%.
Recommended Fast Options Trade: Rosetta Resources (NASDAQ: ROSE)
ROSE broke out of a trading range at $38, and then broke above resistance at $40. It should continue moving higher if resource stocks continue their leadership. Here is the best way to play more strength in Rosetta Resources …
Buy the Rosetta Resources (ROSE) Apr 45 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 $46.40. That should give you an option price of about $4.20, for a 121% profit.
Close this position and cut losses if the stock closes below $39.60, when the option price should be about $1.20. The stock is currently trading at $41.95. The computer-simulated probability of this option hitting its target price is 26%.
Profits Taken on Current Position: Halliburton (NYSE: HAL)
Halliburton (HAL) hit its target price Thursday and the HAL Apr 50 Call was closed for a 112% profit. Sell-to-close your position now and take your profits if you have not already done so.
Action to Take on Current Position: Coventry Health Care (NYSE: CVH)
Close the CVH Apr 32 Call. The position reached its three-week maximum holding period Thursday without hitting its target price.
* 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 recommendations, as the profit probabilities may no longer be valid.
Ken Trester is editor of the popular Maximum Options program. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to
