Alan Knuckman's Bullish JC Penney Trade

Speaking on Bloomberg Markets, Alan Knuckman of Bulls-Eye Option suggested a bullish options trade in J C Penney Company Inc JCP.

He said that J C Penney has got a really significant support at $6.50 and he thinks that there are some bullish signs for the stock. He explained that it reached new lows last week, but its implied volatility didn't reach its new high. Knuckman sees that as a sign of a bullish divergence and he wants to sell the March 6.50 put for $0.30 to make a bullish bet. The break even for the trade is at $6.20 or 6.63 percent below the closing price on Monday.