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Idea 466 - Centene Corp (CNC) Poised To Break $100
Several analysts are confident Centene Corp stock will continue its bullish run and break above the psychological $100.00 handle. Here are two of them – Oppenheimer Holdings, Inc. Reaffirms “Buy” Rating for Centene Corporation (CNC) and Centene Corporation’s (CNC) Buy Rating Reiterated at Cowen and Company.
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Technicals
From a technical perspective, a rising trendline is in play that dates back to a low posted in late 2016. Buyer’s protected the trendline earlier this month on a momentum driven decline which reaffirms that it is widely watched and respected.
*source Tradingview.com
If you agree there's further upside ahead for Centene Corporation, consider this trade which is a bet that the stock will continue to advance at least a little over the next seven weeks.
Buy To Open CNC 15Dec17 92.50 Puts (CNC171215P92.5)
Sell To Open CNC 15Dec17 95.00 Puts (CNC171215P95) for a credit of $1.18 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when CNC was trading near $94.50. Unless the stock rallies quickly from here, you should be able to get close to this amount.
If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee). Each contract would then yield $116 and your broker would charge a $250 maintenance fee, making your investment $134 ($250 – $116). If CNC closes at any price above $95 on December 15, 2017, both options would expire worthless, and your return on the spread would be 87% (1264% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
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Changes to Investor’s Business Daily (IBD) Top 50 This Week:
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
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Any questions? I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts. seth@terrystips.com
You can see every trade made in the actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here. Why wait any longer to make this important investment in yourself?
I look forward to having you on board, and to prospering with you.
Terry
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