Buy Alert: December 17, 2015
Buy Alert: December 17, 2015
Option Strategy:
Buy Southern Company $SO February 19, 2016 $47.00 calls for $1.05 or better.
Commodity Outlook: Precious Metals, Energy
The US Dollar is in rally mode today…
As I write, the Greenback is up by 1.45%, which in turn is knocking the spots out of commodities. WTI crude is down by 1.6% while the entire precious metals space is deep in the red as well.
Here’s the deal…
With hard assets like crude, gold, silver, etc., all deeply oversold, I’m hesitant to bet on further downside. The slightest bit of bullish news could send these commodities soaring back to higher ground.
So instead of trying to pick a bottom in these weak assets, let’s once again look to the utilities space. With the yesterday’s Federal Reserve meeting out of the way, a few operators are seeing nice upturns.
Here’s one looking especially tempting from a technical perspective…
Resource Trade: Southern Company $SO
As you know, we made a nice trade in $SO a few months ago. The electric utility operator ran to our first profit target at $46, giving us a gain of just over 80% on our calls.
After a few weeks of sideways trading action, $SO is once again on the move to higher ground. Shares are breaking above technical resistance at $46 as I write.
So here’s what we’ll do…
Buy the $SO February 19, 2016 $47.00 calls for $1.05 or better.
The current bid/ask spread for this contract is $0.95/$0.98.
Do not pay more than $1.05!
Our official entry price for performance tracking is $0.98. Your price may be higher or lower.
Exit Strategy:
Remember, we want $SO to trade higher. Our first profit target is $48.00 while our second target is at $50.00.
Our risk control line is at $44.70. If $SO trades below that level, conservative investors should consider closing this trade to preserve capital.
Until next time,
Justin Bennett
***Editor’s Note*** Please be sure to read the new free report posted to the member’s only section of the Commodity Trading Research website. This valuable report focuses on trade management techniques specifically designed for the style of trading we do in the Options Profit Pipeline.
Also, this is the last time you’ll hear from me until the New Year. From all of us here at Commodity Trading Research, we want to wish you a wonderful Holiday Season!
Category: Commodity Trading
