Bullish – AVGO – $411.68
Equity markets are starting to break out higher on optimism of vaccine distribution and a potential bipartisan stimulus bill. The surge in COVID cases still skew risks to the downside for the few trading sessions but longer term, we should see equities continue to rally in 2021. Look to small caps and equal weight to outperform the S&P and Nasdaq market cap indices as stimulus lifts highly levered companies.
AVGO Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang reviewed Broadcom earnings next week. AVGO is one of the largest semiconductor stock, generating strong free cash flow and a diversified business in margin margin software. AVGo trades at a very reasonable 18x earnings and generates 3.25% yield for investors, providing strong fundamentals. Expecting AVGO continue higher on earnings, Tony suggested selling a Jan $410/$390 Put Vertical @ $8.20 Credit.
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