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When the pandemic began, some of the hardest-hit stocks were in the travel industry. Armed with very little information and a constant barrage of bad news in the media, nobody wanted to set foot in an airplane, hotel, or cruise ship.
But now, science has caught up to the virus, and we know a lot more about what it takes to stay safe.
What that means is people are going to start traveling a bit more. It won't be like it was before, but it will likely be a good start. And that means people will look once again to online booking sites. They will compare prices, look at amenities and schedules, and start to get out of the house.
Fundamentally, the businesses they serve are seeing more bookings and generally less fear and more interest. Not to mention, as online companies, they have rather low overhead; not being saddled with lots of commercial rent payments draining cash flow.
That has traders eyeing pick-and-shovel plays in the travel industry like booking sites. But just trading any old stock here is a recipe for failure. What you need is a little research to build a profitable options strategy to take advantage of this rebound.
Money Morning Quantitative Specialist Chris Johnson has just the plan. He's bullish on the travel booking stocks, but he's building his options trading strategy around a technical indicator that shows which stocks are most likely to run higher.
And the stock he's building his trade around has many attractive features. Chris likes that the rising trend has developed to the point where the 50-day moving average just crossed above the 200-day average. You may have heard this called a "Golden Cross" before. As the name suggests, it is a bullish event and tells us the trend is setting in and the stock is heading higher. The short-term trend is now aligned with the long-term trend.
Using such technical indicators is a great way to find out if the market agrees with your fundamental assessment of the company. For this stock, that answer is "yes."
Now that we've found the right stock to trade, it's time to build our options strategy around it.
And the trade Chris put together could double your money…