Options Trade of the Week

 

Trade:

8/10/2010 WHR $86.07 Buy 2 August 85/90 call spread limit price $ 1.65
target 3.00/ by August 17th
stop 1.10/or a stock close below 83

Reasoning:

WHR- looks like it found some support in the 85 level the past few weeks. A move above the 87.31 level should see the $90 level quickly (same day or with a few days). WHR acts like both a retail/housing stock and with both sectors stronger recently odds favor a push higher. If it closes below 83 then downtrend will resume. A weaker dollar and easy money should be a catalyst in the near term. On April 26th hit a high of 118.44 and has been in a downtrend since. Getting over the 200MA at $87.31 is first hurdle. WHR on July 20th raised it’s guidance but the market failed to respond however the bears haven’t been able to take the stock lower since July 20th with any conviction.

Leave a Reply