Peabody Energy (BTU) , the a coal mining and energy company, has been on a tear lately. A few days back, a customer went long the Sept. 24 and 25 calls. I think this looks like it wants to make a run over $25.
With that in mind, I am a buyer of the Sept. 16 $25 calls for about $1.50. I would look to sell them when BTU breaks over $26 a share or when the trader that bought the $24 calls moves to unwind his or her position.
Trade: Buy to open one BTU Sept. 16 $25 call for $1.50.
Technically, the bears are in control of this market now.
There are plenty of stocks that look like value plays but aren't as the market continues to drag more share prices down.
Here's why I'm going with a diversified value name.
We suspect any bounce would likely be one within an ongoing correction.
Selling by skilled traders who are reading the technical signs and are trying to cut their losses could propel stocks even lower.