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This morning I am recommending a bullish trade on Enable Midstream Partners, LP (NYSE:ENBL). This company gathers crude oil and natural gas, and processes natural gas. They also run transportation and storage operations.
I’ve been saying for a while now that we have been in a “rolling bear market,” but it now seems to be turning into a full-fledged bear market. In fact, this has been the worst December performance for the stock market since 1931.
The selling could last for a few more days, but I do still think the market is due for a bounce in the near term. There is definitely “blood in the streets” right now, so I am still expecting some kind of rebound to materialize, even if it is short-lived.
Rallies during bear markets can be much steeper and stronger than you might expect, but they should not be trusted. Instead, the key to trading in a bear market is that you should trim your holdings strategically as the market is rallying.
Daily Chart of Enable Midstream Partners (ENBL) — Chart Source: TradingView
ENBL has developed support just above the $13 level, and it has spiked above $15 in the last week. If the stock begins a sideways channel, it will likely bounce between those levels.
When the market is continually going higher, I say that it’s important to have some put options in your portfolio. Well, now that the market is moving consistently lower, it’s going to be important to hold some call options in case of a sharp rally.
That’s why I am recommending a cheap bullish call option on ENBL.
Buy to open the Enable Midstream Partners, LP (ENBL) Feb 15th (2019) $15 Calls (ENBL190215C00015000) at $0.35 or lower.
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InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.