In this post is a fresh list of 25 bullish stocks to watch for the week of September 14, 2009. I will be keeping my eye on all of these stocks this week, but chose only one to write a detailed option trade about this week. All of these stocks demonstrated tremendous strength during Friday's trade breaking out to the upside on huge volume. The table below shows the company, ticker, Friday's per share % increase, and Friday's volume increase (% increased compared to 50 day average). For your convenience I have ranked the stocks in order from greatest to least volume % change.
|Company||Ticker||Price % Change||Volume % Change|
|Tri Valley Corp||(NYSEMKT:TIV)||164.96%||11291.34%|
|Ambassadors Intl Inc||(AMIE)||75.31%||1705.57%|
|Discovery Labs Inc||(DSCO)||78.96%||1356.74%|
|Pinnacle Gas Resources||(PINN)||13.51%||1116.25%|
|Warren Resources Inc||(NASDAQ:WRES)||29.84%||725.83%|
|Innodata Isogen Inc||(NASDAQ:INOD)||5.69%||676.12%|
|Eagle Rock Energy Ptnrs||(NASDAQ:EROC)||9.32%||356.02%|
|Exterran Holdings Inc||(EXH)||11.48%||355.00%|
|Select Comfort Corp||(NASDAQ:SCSS)||12.11%||217.41%|
|United Parcel Svc Cl B||(NYSE:UPS)||4.44%||204.66%|
|Powerwave Tech Inc||(NASDAQ:PWAV)||9.27%||193.93%|
|Commercial Vehicle Group||(NASDAQ:CVGI)||15.82%||190.16%|
|B J Services Co||(BJS)||2.63%||123.09%|
|Cirrus Logic Inc||(NASDAQ:CRUS)||4.48%||117.66%|
|Take-Two Interactv Sftwr||(NASDAQ:TTWO)||3.86%||95.38%|
|Amer Axle & Mfg Holdings||(NYSE:AXL)||16.14%||90.88%|
|Alliance One Intl Inc||(NYSE:AOI)||7.78%||30.62%|
The stocks which are most attractive to me from the list above are: Informatica Corp, Innodata Isogen Inc, Fibertower Corp, and Select Comfort Corp. However from the four listed, the only stock which has options available to trade is Informatica, so below is a detailed option trade involving Informatica. To learn more about the option strategies outlined in this post, risks, pricing, calculations, other strategies, and options in general, click here.
INFA Option Trade: I am quite bullish on INFA longer term, therefore I will be looking at opening a diagonal call spread. To open this I would purchase in the money March 15 call options and sell October 22.50 Call options against them. As of Friday's close this position could be opened for roughly $600 per option spread, and If I happened to get called out (INFA above 22.50 at October options expiration), this position would yield 25% in just over 1 month. If I was not called out, I would look at selling a similar call option for the month of November. This is a bullish income generating strategy.
The ideas outlined above involve the use of stock options. The reason option volumes have surged in the last 5 years is because they are a great way to hedge your portfolio as well as create income off of your shares (see option volume chart).
These are just examples and are not recommendations to buy or sell any security; if you're more bullish/bearish, you’ll want to adjust the strike price and expiration accordingly.
Disclosure: No Positions