By Don Fanstone, Member, Kitchener/Waterloo User Group

Put and Call graphicOption Blog July 26, 2015:

VectorVest advises buying undervalued High VST stocks in a rising market.

VectorVest will help you make money if you follow VectorVest timing advice.

USA: Col. Guard Bearish, MTI .88   Dn/Dn, C/Dn,    VV: Do Not Buy.

CA: Col. Guard Bearish: MTI .66    Dn/Dn, C/Dn    VV: Do Not Buy

The market is nearing an historical bottom in Canada with the MTI at .66, but it can also stay down for some time. Wait for the Green Light Buyer signal. Keep a watch list of stocks reporting strong earnings and a strong outlook going forward.

The USA, while falling significantly, may have further downside depending on the earnings reports. Even good companies with strong earnings such as Skyworks (SWKS) were punished with a 5% drop in price. Wait for the Green Light Buyer Signal!

CVS Drugstore reports in the USA this week, another steady climber staying above the 40 day MA.

Consider a January 2016 $95 Strike (Call) if the earnings report is positive and the market is rising.

SBUX reported great earnings and popped up, but could not hold all of the increase.

Buy a January 2016 $50 Strike (Call) (or lower strike price) when the market turns up.

NOTE: SBUX is overpriced compared to the value assigned by VectorVest, but sports a high RS and high CI value.

CVS and SBUX appear in both Vector +Vector 1.25 and Jakes Patent searches.

Linamar LNR has fallen from a high of $88.73 to a price of $76.66 this week. Earnings will be reported approximately Aug. 7th.

Consider an October or January 2015 $70 Strike (Call) Both Magna and Linamar are expected to report strong earnings based on automotive sales.

All of these stocks are great candidates for option trades or owning the shares. If you want to own the stock outright at a lower price, sell a PUT one strike out of the money, with a one month expiry.

Sells for the Week of July 20th:


Buys for the Week of July 20th:


DISCLAIMER: Options trading involves risk and is not suitable for everyone. The information contained in this Blog is for education and information purposes only. Example trades should not be considered as recommendations. Options training is strongly recommended before placing any trades. VectorVest offers a basic options course online and occasional intermediate options workshops in Canada each year.