Trade Ideas for February 19, 2010 - Valero Energy (NYSE:VLO)

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.

This morning you definitely have a different tone than you have had over the course of the past couple of weeks, with the Fed announcing a that they are raising the overnight lending rate for banks a quarter percent. While the markets are noticeably down this morning, I not going to put it past the bulls to find some asinine reason for recovering off the early morning lows and managing to rally the markets by the end of the day. Now, I don't expect this to happen and think the odds of it occurring is highly unlikely (maybe a 5% chance), but I'm not going to put anything past the complacency this market has exhibited of late to do something that knocks me right off my rocker.

The big report that all eyes will be focused on this morning will be the Consumer Price Index report expected out at 8:30am ET. Should this number disappoint, we could see a nice little meltdown today.

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Currently, futures are showing the Dow down 54 points, followed by 9 points on the Nasdaq and 8 points on the S&P.

Here are Today's Trading Ideas...

Potential Swing Trade (Long): Valero (VLO) - Not the best trade setup in the world, as it is getting rather difficult to find a stock that isn't completely overbought given the market rally of the past two weeks. Nonetheless, VLO has a cup & handle pattern emerging, that should it manage to complete the pattern, could be indiciative of a huge breakout. Currently it is now trying to put a bottom in on the "handle" portion of the pattern. Stop-loss here would be 17.15.

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