Today, I would like to make a suggestion on a stock that is oversold and getting a bit of a bid today.
The stock is Chubb Ltd. (CB).
It is trading right around the lower band on its daily chart, which is $106.74 and as I write, CB is trading for $105.62.
I am going suggest you trade the June monthly options. And I am going to recommend a debit spread,
Here is the trade.
Buy to Open June 19th - $105.00 call @ $6.50
Sell to Open June 19th - $110.00 call @ $4.40
The net debit will be $2.10 per spread, with a maximum gain of $2.90 per spread.
Based on the nominal portfolio, limit the trade to 5 spreads or about 1% of the portfolio.
