As we all know January’s options contracts expired last week and that means its time to go to work looking for our next big score.
With a new President coming into office and the continuing decline in the Domestic and World Markets, this could be a historic month in terms of a huge Bull rally.
But, this may not be such an ease task. Lets take a look at what people are saying Obama will do in his first few days in office.
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“Obama is considering setting up a government-run bank to acquire bad assets clogging the financial system.”
Im not sure this is going to do much good for the short term. I would be looking to find a bank or other financial sector stock and buy a few Feb Puts. Here is my list of what Ill be watching over the next few weeks.
BAC -
Bank of America opened last week at $12.86 and closed the week at $7.15 on very heavy volume nearing 1.1 billion shares. More than double the weeks prier volume of under .5 billion.
Look for this stock to continue to fall, but only after making a spike to the up side early in the week.
The Play
BYOBI Feb 9.0 Call
look for the early spike to the upside. When this happens sell your call and buy
BYONF Feb 6.0 Put
KEY-
KeyCorp. Opened the week at $7.58 and closed up from its low of $5.71 at $6.31 on slightly higher than average volume. This after coming of a more than 9% gain over the last 3 weeks tells me its time to buy puts. Despite the fact that financials are all poised to trend down the charts are telling me that this stock is in trouble.
The play
KEYNA Feb 5.0 Put
Put a limit order on this one for .65 and you should get in no later than 1/21.
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“Obama is also working with lawmakers on a $825 billion fiscal stimulus plan by mid-February to jolt the economy into life and shore up or create more than 3.5 million jobs.”
This boys and girls is the cash cow of all cash cows. This is as close as I will ever come to calling something a sure thing.
Look for basic materials to surge from this point. I’m talking about steel, copper, oil, gold, silver, uranium……..I’ve been looking for small cap companies with low Debt/Equity.
GFI-
Gold Fields Ltd. closed the week at $8.23 down .40 from its high on average to lower than average volume. If and when over the next week GFI reaches a price of $8.70 start looking to buy calls.
The Play
GFIBU Feb 7.50 Call limit 1.40
GFIBB Feb 10.0 Call limit .45
I don’t think GFI will make it to $10 this month but should reach a high @ $9.50. I would be looking to sell at this price and pick it back up again late in the month on a down turn.
EGY-
Vaalco Energy Inc. closed the week at $7.22 up big from its low of $6.31 on lower than average volume. If EGY hits $7.50 this week, look out! In my opinion oil is heavily over sold at this level. The price of oil should be well over $50 a barrel by months end.
The Play
EGYBU Feb 7.50 Call limit .65
Once EGY reaches $7.40+ start looking to jump in on this one.
WOR-
Worthington INDS. closed the week at $10.84 between its high and low for the week of $11.05 - $9.64 respectively.
Volume continued to trend below average for the 4th straight week and has set itself up for a nice up swing with heavy volume starting next week. If WOR hits $11 its time to take a ride.
The Play
WORBB Feb 10.0 Call limit 1.60
WORBV Feb 12.5 Call limit .40
