In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates. Many of these need to see a break past key support or resistance:
ROP, BF.B, RGR, DHR, CNI, UNH, TWC, CXO, MHK, SLB, SRCL
NEW DIRECTIONAL CALL PLAYS
McDonald's Corp. - MCD - close: 93.08 change: +0.94
Stop Loss: 89.90
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below
Why We Like It:
Shares of this Dow Jones Industrials component are showing relative strength. I want to warn you now that this is an aggressive, higher-risk trade. MCD is in rally mode and the stock did break through resistance near $92.00 and its 150-dma and 300-dma. MCD has also broken through one trend line of lower highs. Yet there is still additional resistance at the simple 200-dma, the $94.00 level, and another trend line of lower highs. You could also argue that MCD is overbought after a five-week rally. That doesn't mean the stock cannot extend its gains.
I am suggesting small bullish positions at the open tomorrow. Nimble traders may want to wait and buy a dip near $92.00 instead. I do expect a short-term pullback once MCD near resistance at $94 and its 200-dma. Our multi-week target is $98.00.
- Suggested (SMALL) Positions -
buy the Oct $92.50 call (MCD1220j92.5) current ask $1.89
Entry on September xx at $ xx.xx
Average Daily Volume = 4.7 million
Listed on September 18, 2012