ACTION:

Buy to open the OPK March 7 puts (OPK160318P00007000, $0.35, up $0.05) at current levels.

Dear Momentum Options Subscriber,

I have a New Trade this afternoon on a name that could make a significant backtest to multi-year lows. Shares are north of $8, but they could tumble to $5 over the next six to eight weeks.

 

Opko Health (OPK, $8.06, down $0.18)

Buy to open the OPK March 7 puts (OPK160318P00007000, $0.35, up $0.05) at current levels.

I like these put options at current levels, and you can use a Limit Order up to $0.45 to get the best fill.

Shares tested a 52-week low of $7.12 last week. If they fail to hold $7, there is serious risk to $5 and prior multi-year resistance.

The breakeven point for the trade is $6.65, technically, by mid-March. A double would occur if shares trade below $6.30. If the stock does fold like a cheap lawn chair to $5, these options would be $2 “in the money.”

Shares are volatile, and there is also risk to $9-$10 on any positive drug-development news. The technical pattern shows lower highs and lower lows, however, and the major moving averages are rolling over.

 

All prices given in this update are current as of 3:00 p.m. EST.

I hereby disclose that I will be participating in the aforementioned trade(s). Every new Momentum Options recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options