NEW DIRECTIONAL CALL PLAYS
ITC holdings - ITC - close: 93.30 change: +1.23
Stop Loss: 90.95
Current Option Gain/Loss: Unopened
Time Frame: four to six weeks.
New Positions: Yes, see below
Why We Like It:
ITC is in the electric utilities industry.
The stock looks interesting given its long-term trend of higher lows (see weekly chart below). Investors clearly bought the stock at support and now it's bouncing. Shares displayed relative strength today with a +1.3% gain.
The company did make headlines today after Mississippi regulators rejected Entergy's plan to spin off its electricity transmission business and sell it to ITC. The vote was 3-0 against the $1.78 billion deal. The regulators claimed that this deal would take authority to set power rates away from Mississippi state regulators. The news came out during the day and failed to have any negative impact on ITC stock. Shares actually closed at their high for the day, sitting just below technical resistance at its 100-dma.
You will notice that ITC can be a volatile stock. I could not find any explanation for the gap down on November 13th. Therefore I am suggesting small bullish positions to limit our risk. It's also worth noting that the $96.00 area and its simple 50-dma (also near $96) could be overhead resistance.
Use a trigger to buy calls at $93.50. If triggered our target is $98.50.
Trigger @ 93.50 *small positions*
- Suggested Positions -
buy the 2014 Feb $95 call (ITC1422B95) current ask $3.30
Entry on December -- at $---.--
Average Daily Volume = 419 thousand
Listed on December 10, 2013