Buy Alert: September 22, 2016

| September 22, 2016

Buy Alert:  September 22, 2016

 

Trade Details

Buy KB Home (KBH) October 21st 16 Calls for $0.45 or better (lower)

 

Why?

I was strongly considering a put here, but this opportunity in KBH is even better.  Housing numbers have been gaining strength and now we know (from the Fed) that interest rates are staying put for the time being.  Meanwhile, the stock is trading at just 9.3x projected earnings.  I believe there’s decent upside in the short-term.

We’re going to buy October calls.  Conservative investors can take profits at $16.50.  Aggressive investors can hold up to $17.50.  For risk control, conservative traders should exit at $14, while more aggressive traders can hold down to $13.

 

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Category: OTW Buy Alerts