Options Action: A Bullish Trade On Comcast Corporation (CMCSA)

On CNBC's Options Action, Carter Worth analyzed Comcast Corporation CMCSA from a technical standpoint. He said that Comcast's (CMCSA) relative strength is impressive. It is up 4% for the year, while S&P 500 is down 8%. People are selling a lot of things, but they are not selling Comcast (CMCSA). He looked at Comcast's two year daily chart and pointed at well defined bullish trend. He also showed its five year daily chart, which shows bearish to bullish reversal. If you are looking at defensive names to own, this is one of the best, believes Mike Khouw. Consumers are still not canceling their cable TV. Mr. Khouw also likes its valuation, and he wants to get long CMCSA with a call spread. Mike Khouw wants to sell the October 20 call for $0.4, and buy the October 18 call for $1.10. Additionally, he wants to sell the October 15 put for $0.65. This trade would cost him a nickel, and Mike Khouw added that it is really important to use limit orders if you decide to pursue this trade. He would get long at $18.05, if the price moves higher. If Comcast (CMCSA) drops below $15, he would have to own it. Comcast Corporation (CMCSA) closed at $17.46 on Friday, with a decline of 1.58%.