Listen to OIC's Wide World of Option 54: The Rebranding of OCC and Stock Repair On Profiles & Pe...
5 Option Ideas for Fast-Rising Dillards
04/10/2012 7:00 am EST
Dillards (DDS) has been consolidating after a strong move higher from $49 in February in a bull flag topping at $64 and with a lower limit of $62. It has a bullish Relative Strength Index (RSI) and a Moving Average Convergence Divergence (MACD) indicator that is negative, but improving. Both would support a move higher.
There is no overhead resistance on a breakout, but it would create a target on a measured move to $78. Short interest is very high in this name at over 15% and could facilitate a short squeeze. Support is found lower at $60 and $55.50, followed by $52.70.
Trade Idea 1: Buy the stock on a move over $64.20 with a $1 trailing stop
Trade Idea 2: Buy the May 65 calls on the same $64.20 trigger. These were offered at around $2.50 recently
Trade Idea 3: Sell the May 60 puts on the same $64.20 trigger. These were bid at around $1.70 recently
Trade Idea 4: Buy the May $65/$60 calls on a bullish risk reversal on the same $64.20 trigger. These were offered at around 80 cents recently
Trade Idea 5: Sell the May $60/$55 put spread on the same $64.20 trigger. These were bid at around $1.00 recently
Trade Idea 6: Buy the May $65 calls, selling the May $60/$55 put spread on the same $64.20 trigger. These were offered at $1.50 recently
By Greg Harmon of Dragonfly Capital
Related Articles on OPTIONS
This rebroadcast of OIC's webinar panel program discusses how options professionals use technical an...
Are you curious about what Gamma Scalping is and how you can use it as a part of your investment str...
This rebroadcast of OIC's webinar panel discussion covers why implied volatility levels drive option...