As the stock market enters earnings season, I’m feeling concerned… and it seems like I’m not the only one. 

My bet is that we can expect volatility in the coming weeks. Our trading strategy over at Profit Amplifier focuses on avoiding risk, and one way we can do that is by adding exposure to utility stocks — a defensive sector that traders turn to when they are looking for low-risk trades. 

Time To Get Defensive
While looking through my screens, I found a very attractive call option trade in Southern (NYSE: SO), a gas and electric company (and the second-largest utility stock in the United States, in terms of customer base). 

#-ad_banner-#Southern’s fundamentals are solid, with cash flow from operations growing steadily. The company is headquartered in Atlanta and serves a part of the country that enjoys relatively stable weather at this time of year, which reduces the risk of a natural disaster disrupting operations. Analysts expect the company to announce earnings around February 21, so picking a call option that expires before then further decreases risk. 

The chart confirms my bullish outlook. After recently breaking above its 200-day moving average (MA) — the solid blue line in the chart — the stock has continued moving higher, which is a bullish trend. 

The most important part of the chart is the Profit Amplifier Momentum (PAM) indicator in the bottom panel of the above chart, which gave a “buy” signal a few days ago. This confirms the “buy” signal from the weekly chart (below). 

Based on the chart, the price target for SO is above $50, and we can expect the current trends to push shares up toward that level over the next few weeks.

With no company news or bad weather on the radar, the period between now and mid-February should be smooth sailing, which makes this low-risk utility stock an attractive play in a market of rising volatility. As traders turn to defensive stocks like this one to ride out the rough patches, the call options trade I recently recommended to my Profit Amplifier readers could see a significant gain — as much as 50%, in fact.

An Invitation To Trade With Me 
Unfortunately, I can’t share the exact details of that trade with you today. This is an open, active trade, and it wouldn’t be fair to my premium subscribers to give it away for free. That said, if you’re familiar with how options work, then feel free to research this trade on your own. 

Remember, this is not an official Profit Amplifier trade — it’s merely a suggestion for those of you who are already familiar with options. If you like what you’re getting, then you can consider joining us for more trades at this link.

If you’re not an experienced trader, then you can still learn more about how my strategy works… all it takes is a few minutes of your time. In Profit Amplifier, we use a simple options strategy to profit from even the smallest moves in either direction — making far more than investors who simply buy and sell stocks. In fact, we’ve closed a number of triple-digit gains in the last two months. To learn more, go here.