On CNBC’s “Options Action,” Tony Zhang said he sees a slow rotation into industrials and Deere & Company (NYSE:DE) could be a leader in the segment.
The stock has been trading in a range from $320 to $385 since February, but recently it broke out above the range. It has also started to outperform its sector, which Zhang sees as a confirmation of the rally.
To make a bullish bet, Zhang wants to buy the December $380/$410 call spread for a total cost of $13.80. The trade breaks even at $393.80 or 1.15% above the closing price on Friday. If the stock moves to $410 or higher at the December expiration the trade is going to reach its maximal profit of $16.20.
