Trade Summary: January 9, 2017

| January 9, 2017

January 9, 2017

 

Trade Rationale

We’re off to the races this new year.

The news of the week… Dow 20,000 Watch.

Every tick higher makes a new headline.  Every dip back makes haters call for the fall.

Look, Dow 20K is a big deal.  It’s a big psychological point.  Once we break through it… and I believe we will in the next few days… once we break higher, the market will pause, then start trending again.

Economic data looks strong… corporate profits are strong… and unemployment is falling.

So, I’m saying we stick with the current trend, and pick a strong sector.  One that has surprised us in the past… BANKING.

Banking has been on a roll, and stocks are marching higher.  Plus, the next Fed meeting is kicking off at the end of January… and should provide good news for the bank industry in general.  (Any talk of raising rates will drive bank profitability.)

So let’s get long a handful of big Financial movers…

 

Trade Details

#1) Buy American International Group (AIG) Mar 17th $67.50 Calls up to $2.20

We want AIG to move higher…  Profit exit points are $69 and $72.   Exit at $64 or $62 to conserve capital.

American International Group

#2) Buy Capital One Financial Corporation (COF) Mar 17th $92.50 Calls up to $2.50

Take profits if COF trades above $94, or for aggressive traders, $96.  For risk control, the conservative exit level is $85.  Lastly, $82 is the final exit level for aggressive traders.

Capital One Financial

#3) Buy  BB&T Corporation (BBT) Mar 17th $48 Calls up to $1.30

We want this stock to climb into the new year.  Profit levels are $49.50 and $50.50, conserve capital at $45 or $44.

BB&T Corporation

 

Category: AOA Trade Summary