Even in the middle of a bear market there will come opportunities on the long side and although they must be categorized as aggressive because of the condition of the overall equity market, they still offer some great profit potential.
Norfolk Southern made a very bullish Morning Star or Birth pattern today and was able to use the 50 day moving average as a launching pad for a possible move higher. The 50 day moving average as you can see, has been a good support level for the stock and until dis proven, it will remain a price level to look for an upward push in price.
The best way to play this will be to purchase July Call Options that are right at the money, which would be the 65.00 call options, currently selling for $250 per contract, each contract will allow you to control 100 shares of the stock. You can do the math on the leverage.
A protective stop should be put into placed based upon the underlying stock.
If you see the stock close below the low point of the Morning Star pattern (61) then all bets will be off and your call options should be liquidated.
For those of you who wish to learn how to calculate what the option price will be given this scenario of the price moving below $61, drop , me a line and I will explain it to you.
You can also research the Delta of an option and find out how to calculate this as well.