Loving Volatility After FOMC Minutes

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Volatility’s been on the rise this month, and today’s pro trader wants to make it her best friend.

Sarah Potter of shecantrade.com told viewers of today’s Morning Market Briefing she’s interested in upward-trending stocks that have fallen to support levels. Recently those names include MasterCard (MA), Visa (V) and Goldman Sachs (GS).

“I’m not looking to trade any stock now that’s about to breakout,” she said. “I want to trade stocks that have previous highs or previous lows to get to.”

This matches her view of the broader market, which swung wildly yesterday after the Federal Reserve released minutes from its last meeting.  Nonetheless, she saw potential for a more bullish tone if the the S&P 500 closes back above 2720.

The good news in Potter’s view is that the range-bound, volatile conditions are good for trading — especially when customers leverage moves between certain levels with options. Today, she added she might return to MA after successfully playing its rebound yesterday.

Cisco Systems (CSCO) is another potential bounce candidate. This time she may buy calls if the networking giant tests $42.75 and target a potential move toward $45. “I am looking for more reasonable spaces where it has been before I and I would be more comfortable looking for it to return to,” Potter said of her approach.

However she said Facebook (FB) may be a candidate for bearish put-buying if it continues to hit resistance around $179.

Click here for more on Potter’s custom trend-analysis tool.

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Dr. Don Pratl is Director of Trader Development and Education for TradeStation. He joined TradeStation in 2016 after holding similar roles with other online brokerages. Don’s long career in the financial services industry reflects expertise in administering trading and investment strategy programs for retail investors as well as financial services professionals. Since the 1980s, he has held various positions in areas including CBOE trading floor order execution, marketing, sales, personnel management, training and customer service. Don holds series 3, 4, 7 and 63 FINRA licenses, earned his Ph.D. in Organization and Management, and his M.A. and B.A. in Political Science. He has been an occasional adjunct college instructor since 2004 at a range of institutions, teaching undergraduate, graduate and doctoral students using in-class and online formats.