After taking some good gains on the volatility calls in recent days, Staples, and McDonald’s, many positions in the open portfolio took a hit on the 1,000-point move lower. I recommend holding all position, though. There’s still time remaining.
Today, I wanted to introduce some new opportunities, as the market begins to recoup some of its loss. If the Fed extends QE3 as it has hinted, the markets have an opportunity to rally back ahead of the elections.
For example, Celgene is finding support at its 200-day moving average with an oversold over-extension on MACD. One Wall Street firm just rated the stock a strong buy with a $104 price target, with arguments for higher EPS. Consider buying to open the January 2015 90 calls up to $5.00.
Gilead is showing strong signs of reversal off oversold MACD and MFI. I’d like to see a move back to $107.50 from $99 here. Consider buying to open the GILD January 2015 105 calls up to $5.00.
As always, do not risk the house. Risk just 1% to 5% on each trade. Never risk 100% on anything in this market. It’s too chaotic. Let’s jump back on the streak we enjoyed since December 2013. Enough of the market chaos…
Ian L. Cooper