This Trade Could Double Your Money in Two Months

Option Trade of the Day: Boeing (NYSE: BA)

Friday saw stock indices with a slightly mixed performance. The Dow and S&P opened higher and remained in positive territory for the rest of the day, but both saw a pretty sharp drop in the final five minutes of trading.

[hana-code-insert name=’adsense-article’ /]The Nasdaq opened higher, but moved down in midday and waffled back and forth between positive and negative territory all afternoon.

The ten main sectors showed seven declining and only three advancing.

The materials sector was the worst performing group with a decline of 1.31%.

The stretch of bearishly skewed results from my scans came to an end on Friday with 17 bullish signals and only four bearish signals.

The barometer remained in negative territory with a reading of -28.9. Given that there were more bullish signals than bearish ones, it shouldn’t surprise anyone that today’s trade idea is a bullish one. Boeing (NYSE: BA) appeared on the bullish list for the first time in a long time.

The chart shows how BA is the most oversold it has been in the past nine months. The channel on the chart is a regression channel for the last six months and it shows how the stock is well below the regression line. In addition, the sentiment toward BA hit its lowest reading of the past year last Wednesday.

Buy to open the May18 330 strike calls on BA at $18.00 or better. These options expire on May 18. This option is far more expensive than what I usually suggest in my trade ideas, but I felt it was the best opportunity of the bunch. For these options to double, we will need the stock to move up to $366, but that is only an 11% move, so it isn’t out of the question. The big jump in January moved the stock 18% higher in a very short period of time.

— Rick Pendergraft

OPTIONS DISCLAIMER: Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation,

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Rick Pendergraft, Trades Of The Day

Rick Pendergraft has been studying, trading, analyzing and writing about the investment markets for over 30 years. He has worked for some of the largest financial publishers in the world and he has been quoted in the Wall Street Journal, USA Today, the New York Times and the Washington Post. In addition, he has been interviewed on Bloomberg, CNBC and Fox Business News. Rick's analysis process includes fundamental, sentiment and technical analysis.