The ceasefire has been extended.

Does this mean investors can buy the market with confidence?  Or does it simply delay the decision on the next direction of the market?

For me, the extension more likely means the latter.  Perhaps it’s the former.  But the higher confidence trade for me now is to focus on the latter.

That’s where options really kick in.  If I buy stock, I only make money if it goes up.  If I buy calls, I only make money if the underlying goes up, and traditionally only if the underlying goes up by a significant amount.  But if I sell puts or put credit spreads, I just need the stock to not go down, and then I can collect the premium.

There’s still risk, and I hate selling outright puts, so I’ll focus on put credit spreads.  And the delay gives me confidence for the remainder of this week, and then I can re-evaluate next week.

As I look for opportunities focused on the next 3 trading days, while that doesn’t give me a lot of time, the Stock Forecast Toolbox can help me identify stocks with real opportunities for significant returns by implementing put credit spreads for the rest of this week.

One name that popped up yesterday and looks particularly attractive for this setup is DAL:

DAL is not particularly bullish looking relative to the market, but there has consistently been support at the 10-Day Moving Average on recent dips.  There’s a lot of technical support below current levels, and the Toolbox projection aligns with that argument for strong support:

With support projected at levels near the market close of $70.22 on Tuesday, I am comfortable with a simple put credit spread such as the April 24th $69/$68 put credit spread, which went out at $0.32 on Tuesday’s close.  With a maximum value of $1.00, that means I can risk $0.68 with potential upside of $0.32.  That’s a very attractive 47% potential return on risk with a 3-day holding period, and for me, that’s a great way to approach a market that just had a delay in the likelihood of a major shift to the downside thanks to the extension of the ceasefire.  And the identification of this opportunity is thanks to the Stock Forecast Toolbox and the powerful predictive power of the patent-pending Artificial Intelligence that it is built upon.

As the market searches for the next move after an historic rally since the beginning of the ceasefire, now is the perfect time to take advantage of the free 7-Day Trial of the Stock Forecast Toolbox.

If you have any questions, never hesitate to reach out.

Keith Harwood

Keith@OptionHotline.com