Don’t Let The Trade War Get In The Way of This Trade

This sector ETF is ready to jump, and even if it only rallies to its April highs, its calls will likely double in value.

While the media has been focused on the volatility in the tech sector, other areas of the market have been setting up for a move higher.

Read below for today’s trade idea that could double even if the market doesn’t make a big move.

As you can see in the chart below, the Financial Sector ETF (XLF) is sitting on its 50-day moving average, which has just crossed its 200-day average.

Additionally, it’s about to trade over its 5-day consolidation pattern.

All of this is bullish and more bullish than the SPY and QQQ.

This is a sector that the big institutions could push higher as the trade war with China plays out, and even more so if there are bullish developments in the trade war.

The basic trade set up is to be a buyer if XLF trades over $27.30, and then place a stop under $26.50.

However, for options traders, this setup also lends itself to buying the July calls.

If the XLF trades up to its recent high around $28.15 in the next 3-4 weeks, the July 27 or 28 calls are likely to double in value.

Trade smart,

Rick Nartarian, Chief Investment Officer
The American Investor Daily