Buy Calls on Alcoa, Rare Element Resources

Market Outlook Indicators are giving bullish readings, 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. This environment bodes well for option trading enthusiasts. But the increasing cost of commodities is not being lost on traders. Stock prices can be early beneficiaries of rising inflation, but bond prices most certainly do not benefit. That is being played out in the Treasury market, where yields have again risen to the tops of their trading ranges. Recommended Fast Options Trade: Alcoa (NYSE: AA ) AA has been in an uptrend since September. It recently broke above resistance at about $16.60 and should continue moving higher if inflation looks like it is increasing. Buy the AA Apr 18 Call up to 65 cents ($65 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 $18.40. That should give you an option price of about $1.30, for a 100% profit. Close this position and cut losses if the stock closes below $16.60, when the option price should be about 40 cents. The stock is currently trading at $17.21. The computer-simulated probability of this option hitting its target price is 24%. Recommended Fast Options Trade: Rare Element Resources (AMEX: REE ) REE has been in a sharp uptrend since August. On two occasions it has pulled back to its 50-day moving average following a sharp move higher. It has just completed that pullback for the second time and now looks like it is ready to move higher again. Buy the REE Apr 15 Call up to $1.30 ($130 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 $16.10. That should give you an option price of about $2.60, for a 100% profit. Close this position and cut losses if the stock closes below $12.80, when the option price should be about 80 cents. The stock is currently trading at $13.92. The computer-simulated probability of this option hitting its target price is 28%. – 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 new recommendations, as the profit probabilities may no longer be valid. Action to Take on Current Position: iShares Silver Trust (NYSE: SLV ) Close the  SLV Apr 23 Put . The stock closed above its stop price Thursday. 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 all the way back to 1984 and money-doubling average annual profits since 1990.
Negocioenlinea
tdp2664
gol2664
InvestorPlace