As the market continues sideways and 1m trend turns neutral, we look for weak stocks in weak sectors to trade. MYL is part of the Healthcare sector which has experienced a 0.63% move higher this month, however it’s 1m and 6m trend turned neutral today with a technical score of 3.
MYL has a technical score of 3 (weak) and it’s 1m/6m trend has turned bearish on 1/12 while breaking below its $37 support level. As $37 support turns into resistance, we look for MYL to stay level or continue lower towards its $33 support before earnings on Feb 8th. If you agree with this analysis, look to sell a Feb 24 37/38 Call Credit Spread for $0.46 per contract.
This strategy profits if MYL ($36.95) stays below $37.46 by Feb 24th expiration (58% probability). This benefits whether MYL stays flat or moves lower. Risking a max of $54 if MYL was to close above $38 by expiration.