Buy Alert: April 22, 2013

Marcus Haber | April 22, 2013

Buy Alert: April 22, 2013

Trade Details

Buy Weatherford International (WFT) June 2013 $12 Calls for $0.95 or better

Why?

WFT is the last of the ‘Big 4’ oil and gas equipment and services companies to report earnings. The company’s earnings are scheduled for May 2. Judging by the chart, investors seem to be waiting for news to decide what direction to take the stock.

I believe that direction will be up.

You see, the stock is reaching strong support levels just in time for earnings. And based on recent data, earnings could surprise to the upside. One of WFT’s closest competitors, Halliburton (HAL), just blew away earnings expectations. HAL believes the worst pressure on fracking prices is over, and is also seeing growth in international drilling.

Those same factors should benefit WFT. And with earnings coming out in just over a week and such strong support below it, now’s the time to grab calls on the stock. Let’s buy June calls on WFT and give our trade plenty of cushion.