Are Elan, Pfizer, Lilly and J&J Buys After a Failed Drug Test?

What's the best play with these stocks? There should be a very attractive trade coming up Wednesday and or Thursday. Near the end of the day, if still trading lower, sell out of the money puts. Fear of continued losses tends to push portfolio insurance prices up dramatically, while at the same time, the stock should bottom.

It's not one to get greedy with. Hold on for a few days and as the implied volatility falls (hopefully with a nice dead cat bounce) exit out with a quick hit and run for profits.

Otherwise, for longer-term investors, the best play is to wait until we are closer to the next earnings release for an entry.

At the time of publication the author did not hold a position in any stock mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.