Last week I suggested AAPL was ready to move, and since that time the June 210 calls have nearly doubled.
The basic idea behind that trade was a breakout that had pulled back to support in a big-cap stock that is not at all-time highs.
Today I’m looking at a very similar play.
Facebook (FB), broke out of 2 months of consolidation last Wednesday. Since then it has pulled back to the breakout level of $174.30.
This sets up a very low-risk breakout continuation trade.
If FB resumes its breakout by trading over $176, I’d consider that a good entry with a stop under the low of its current retracement.
The low of the retracement is 174.23, so the best stop is under $174.
This is also a great stock to trade options on!
If FB breaks out, a good first target is around 186, which could happen very quickly and lead to a 100% gain in most out of the money options.
Since it reports earnings on April 24th, I’d favor the June options.
I like out of the money options for their lower cost and higher leverage for when I’m really right. So I’m looking at the June 195 calls.
Rick Nartarian, Chief Investment Officer
Darwin Wealth Creation