Hi Shoppers,

I sure hope you’ve been paying attention.

My last two trade ideas were goodies!

Also, my write up on General Electric (Ticker: GE)  in the Option Pit Stop/PIt Report was right on.

If you are not a reader of our free newsletter the Pit Report, sign up here.

We pick one stock each week and our option pit traders – Mark, AG, Griff and I – each break it down from our area expertise, from volatility to macro to candlesticks.

On Feb. 23 I wrote up the chart analysis of GE, it was bumping up against resistance at the $85 level.

I predicted GE to trade over this resistance and trade up to $90 and then on to $100.

On March 3r, GE busted out and within a few days traded over $87.

Yesterday, GE soared and traded just shy of $95.

Is $100 in the cards? As they say, a stock trades over $90, $100 is the next stop.

I also called for Transocean Inc (Ticker: RIG) to trade lower.

Yesterday RIG traded from $7.48 to $6.62.

Doesn’t sound like much, but options provide opportunities to make large percentage gains on stock moves like that.

I also told you Bank of America (Ticker: BAC) was going to trade higher, if it cleared $34.50.

It did not, so no trade was made.

I then said, BAC was going to trade lower and, sure enough, it traded from $32.56 to $30.31.

Nice move.

I just happen to have another goodie here.

Tragic Kingdom
The market was not looking so hot yesterday.

Neither was Disney (TIcker: DIS), check out the chart:

Looks to me like DIS wants to trade back down to that support level at $91.16.

I like a put spread expiring next week:

I like buying the 96 puts with an implied volatility of 32.83 and selling the 91 puts with an IV of 36.35.

Buying a lower IV than you are selling puts edge in your trade.

I would pay around $1.40 for this five point spread.

That downward trend line is a good level to place your stop loss on the upside.

Don’t forget to have your exit strategy in place before you hop in.

Thanks for Reading … See You Next Tuesday,

Licia Leslie