A speculative credit spread trade on a drug company

You know that I am all about conservative option trading and I usually do not promote speculative credit spread trades, but this one from Brent Archer makes sense.

Novartis (NVS) gets Diovan approval in Canada

Most of the time I like to trade with the direction of the stock. For example if a stock is going up I will tend to play a bull put spread, if the stock is going down I will tend to play a bear call spread. One rule is that you should never try and predict the top or bottom of a stock, so it is always better to confirm a direction and trade in the direction of the stock.

There are exceptions and in this case Brent has a good explanation as to why we can try and predict a bottom to this bearish stock and why we should play a May bull-put credit spread below the $45 range. Also take heed of his earnings warning.