CNBC’s Options Action Trade for Oct 7th, 2016 – SPDR Utilities Sector ETF (XLU)
On Friday’s CNBC’s Options Action, the crew analyzed XLU’s recent pullback to a few major support levels and appears to be oversold. Coupled with it’s recent outperformance to the S&P 500 after underperforming since 2009, suggests a possible long entry for XLU. Additionally, looking at the last tightening cycle of 2004-2006, suggests Utilities will outperform as we enter our next rate hiking cycle. Expecting a move higher, Michael Khouw suggested buying a Jan 48 Call for around $1.55 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: CNBC Options Action