Monday, December 5
Stock Watch: INGR
This is another strong stock with high Investors Business Daily ratings. It's uptrend continues with its current consolidation. Institutions would rather not buy a stock too far away from its fifty day MA so they often refrain from their planned accumulation when the stocks price gets too far away.
Now the stocks historical volatility has come in from 28 down to 18 but the implied vol in the options market is still up around 26.
Since we think the stock is going up and vol is high, we need to get long by selling premium. The preferred method is selling put spreads, rather than naked puts which leave us open to big losses.
The INGR Jan 45-50 put vertical is fair at 1.90--selling the Jan 50 put @ 2.40 and buyin the Jan 45 put for .50.
Let's sell the spread there and watch.