June 22, 2011 4:54 AM | 4 min read |
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Stocks in the Insurance Industry have been surging since the beginning of the year and are showing no signs of slowing down. Numerous Insurance companies are trading at, or near, their 52-week highs. The insurance stocks to watch for Wednesday are:1) CIGNA (NYSE: CI): Shares of CIGNA hit a 52-week high of $50.83 in Tuesday's trading session. $51 has been a strong area of resistance since June 1st - a break above that level may lead to a quick, large percentage move, as shorts cover. The stock has gained 38% year-to-date.2) Humana (NYSE: HUM): Shares of Humana hit a 52-week high of $82.00 in Tuesday's trading session. Before yesterday, $81.00 had been an area of strong resistance for shares going back to May 18th. Look for the stock to extend its gains in Wednesday's action, as shorts get squeezed out. The stock has gained 49% year-to-date.3) UnitedHealth Group (NYSE: UNH): Shares of United Health Group hit a 52-week high of $52.25 in Tuesday's trading session. $51 had been serving as a strong point of resistance since May 9th. The stock's ability to hold above that level and close near the high of the day in Tuesday's session bodes well for investors.4) Aetna (NYSE: AET): Unlike its counterparts, shares of Aetna were unable to reach a new 52-week high in Tuesday's trading session. Despite being up 1.6% in Tuesday's early action, the stock ended up closing down 0.3% on the day, as heavy selling volume emerged. This bearish reversal may be the beginning of a double top formation on a three month daily chart.
Moving Average IndicatorsThe “Golden Cross” is a bullish technical signal. It occurs when a stock's 50-day moving average crosses above its 200-day moving average. The indicator, like most, should not be used alone, but is a significant event to consider when evaluating a stock's future prospects.
The following stocks had a “Golden Cross” occur in Tuesday's trading session1) Quicksilver Resources (NYSE: KWK): The stock appears to have formed an inverse head and shoulders pattern on a six month daily chart. A break above $15.41 resistance will provide confirmation. After that, a test of the 52-week high ($15.98) appears likely.2) Agilysys (NASDAQ: AGYS): The stock has gained 85% over the past twenty trading sessions. Shares hit a 52-week high of $8.53 in Tuesday's action. The “Death Cross” is a bearish technical signal. It occurs when a stock's 50-day moving average crosses below its 200-day moving average. The indicator, like most, should not be used alone, but is a significant event to consider when evaluating a stock's future prospects.
The following stocks had a “Death Cross” occur in Tuesday's trading session:1) Juniper Networks (NYSE: JNPR): Shares of Juniper Networks have lost 17.9% since the beginning of June. The stock has a 52-week low of $22.25, which was set on July 1st.2) CA Technologies (NASDAQ: CA): Shares of CA Technologies have lost 6% since the beginning of June. The stock has a 52-week low of $17.60, which was set on August 31st.3) China Yuchai International (NYSE: CYD): Shares of China Yuchai have lost 11.4% since the beginning of June. The stock has a 52-week low of $14.45, which was set on June 30th.4) CSG Systems International (NASDAQ: CSGS): Shares of CSG Systems have lost 3.8% since the beginning of June. The stock has a 52-week low of $17.22, which was set on August 24th. 5) Power Integrations (NASDAQ: POWI): Shares of Power Integrations have lost 1.9% since the beginning of June. The stock has a 52-week low of $26.16, which was set on September 14th.6) SkyWest (NASDAQ: SKYW): Shares of SkyWest have lost 4.4% since the beginning of June. The stock has a 52-week low of $11.29, which was set on July 7th.
Other Stocks to WatchHolly Corporation (NYSE: HOC): Shares of Holly hit a 52-week high of $68.00 in Tuesday's trading session. The stock finished the 2% lower than the high at $66.62, as investors quickly took profits. A break below $64.95 would provide confirmation of a potential double top formation (bearish).Coffee Holding (NASDAQ: JVA): Shares of Coffee Holding have been on fire lately, gaining 72% over the last 15 trading sessions. The stock has started to come into some selling pressure, however, as it cannot seem to break/hold $16. A large correction to the downside may ensue if shares do not crack that level soon, as there is little support at the current price. If the stock falls below Tuesday's low of $12.63, look for selling volume to spike.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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