Jeff Bishop says that Anheuser-Busch (BUD) InBev, the famous beer-maker, is poised for a year-end rally and he is looking to buy the stock on dips looking for a longer-term play. Bishop was waiting for the stock to go ex-dividend — as it was dipping into the distribution date — but he noted that the stock has been in a long-term channel this year making higher highs and higher lows. With a small dip back into the $110 to $115 range, Bishop said he would look for support and then scale into the trade, using the most-liquid options available, expecting those to be out-of-the-money with a $120 strike price and an expiration date two or three months out. He expects to keep a 50 percent stop-loss on the position, while looking for at least a 100 percent upside on the trade over the next month or two.
Jeff Bishop is lead trader at TopStockPicks.com, running short-term trading strategies primarily using ETFs and stock options. At the time this conversation was taped on Nov. 7, he had no shares, options or open orders on the XLV but he was looking at both shares and options for swing trades as described in this interview. The Raging Bull podcast features experts from the site talking with Raging Bull editor Chuck Jaffe on his show, “Money Life with Chuck Jaffe.” You can learn more about Chuck’s daily hour of market and personal-finance chat at MoneyLifeShow.com; you can subscribe to the Raging Bull podcast via iTunes and other podcast providers.