My Trade Plan Details:

• ERX Oct 27, 2023 $68 calls near $1
• Stop: Close under $59
• Target 1: $68
• Target 2: $72

My Reasoning:

This week is going to be yet another difficult one.  If things weren’t tough enough as we try to navigate a potential bond market collapse, we now have to deal with a pending war in the Middle East.

There are so many scenarios to consider right now, but a couple of things definitely stand out to me as winners over the next few weeks: oil stocks and defense contractors.

On the second one, I really suggest you get my previous idea on AVAV back on your radar.  That stock might be ready to finally make a big move now.

For my trade of the week, however, I am looking to go with oil stocks.  Instead of looking to just buy one stock, I am looking to buy a leveraged ETF of a basket of the best oil companies.

My Bullseye pick this week is (ERX).

Of course, ERX will not be an easy play this week.  Nothing ever is.

The stock is already up several dollars in the pre-market today as traders are piling into oil stocks today.  

My plan is to wait for the opening “panic buying” to subside and wait for any pullback during the day today.  That is where I will get started with my first purchase.

If things go my way, I will get a nice smooth shot all the way to near $68, where I would lock in a profit.

If things don’t go exactly as I want, then I am looking to add to this position around $61.  If things continue to fall from there, I will use a closing price under $59 as my stop loss and get out of the trade.

I will also be setting up a higher-probability option-selling version of this trade for Alpha Hunter members today as well, so keep an eye out for that if you are a subscriber.