Navivest Options Writer

03/23/10

Allegheny Technologies (ATI) – $54.03

ATI shares have had a good run since the last week of February. The stock is now seriously overbought and we should see some correction or at the very least, some sideways trading.

Sell the Allegheny Technologies May 2010 60 calls. They are currently asking $1.60. Enter here between $1.50 and $1.70.

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Shares of InterMune (ITMN) are trading at $13.84, currently down $0.14 on the day. The stock in in a downtrend, after rallying from $13.46 on January 22nd, to a high of $17.81 on February 3rd.

The options on the stock are very richly priced and the March 20 calls are asking $2.00! Selling these, translates into a 14% potential in just three weeks on a covered basis. We will be selling uncovered calls, making it a 100% proposition if the stock does not get called away on us.

As a biotech company, there is the risk that the comany could announce some news that sends the shares soaring, but those risks, in the three week time frame we will be in the trade, are limited in our opinion.

THE TRADE:

Sell the InterMune (ITMN) March 20 calls.

TRADE FOLLOW-UP:

The First Solar calls are now bidding just $0.05, down about 95%, which is great for us, having sold those calls. Keep position open.

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