How to Play MetLife’s Breakout (MET)
Shares of MetLife Inc. (NYSE: MET) ended the session higher by 4.63%, trading at $42.06. The company reported strong earnings yesterday, as well as an increase in its book value to $45.54. FBR Capital Markets, Sterne Agee, and J.P. Morgan raised the company’s estimates as well.
The stock has also pushed above resistance with today’s trading, confirming the bottoming pattern that the stock has been trading in for the past three and a half months. The short-term upside price target for the pattern is $45 over three months. Also important to note is that MET is trading back above the 50-day and 200-day moving averages as the Bollinger Bands continue sideways; this further confirms the stock’s potential for an upside move.
Traders can take advantage of this pattern by purchasing the stock near these levels and selling the December $45/37 strangle for $2.15. This will give you a max gain of 12.3% over the holding period (a yearly yield of 37%) with a cost basis of $37.425, should the stock move lower than the $37 level, which is a discount to the current trade price of 11%.
For more information on why MetLife is a great long play, please visit…
http://www.benzinga.com/trading-ideas/long-ideas/10/07/392814/how-to-pro...
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