Cash Cow Newsletter January

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Preston Pierce
5 years ago
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1 Cash Cow Newsletter January In this week s Cash Cow newsletter I would like to briefly analyze the recent price movement in the S&P 500 Index and then look at several new profit opportunities. The $SPX closed nearly flat today, and has remained mostly unchanged throughout the week: The index is still in a 50/100-Day EMA uptrend that's confirmed through the presence of an up-sloping On Balance Volume. 1

2 This week we are going to focus on taking long positions on stocks that are trading near their middle Keltner Channel channels. This will provide us with a favorable entry point and give us a better chance of profiting by expiration. The first profit opportunity we'll look at this week is MA (MasterCard): MasterCard provides transaction processing and other payment related services in the United States and internationally. The company has excellent fundamentals and the stock has done well over the past several years. After closing near the middle Keltner Channel, the stock currently seems oversold. 2

3 We should consider purchasing a weekly January 31st call option on MA to take advantage of any future price growth. The next profit opportunity we'll look at is CVS (CVS/Caremark): CVS provides integrated pharmacy health care services in the United States. The company has consistently increased their Revenue and Retained Earnings over the past several years. After a recent selloff, the stock is on its way back up, and closed near the middle Keltner Channel today. We should consider initiating a Market Neutral Spread on CVS to take advantage of any future price gains while limiting our risk. 3

At current prices the February 2014 50/67.5-strike Market Neutral Spread has a maximum risk of -9.

4 At current prices the February /67.5-strike Market Neutral Spread has a maximum risk of -9.9% with unlimited profit potential: Buy to Open CVS February strike Call Buy to Open CVS February strike Put If CVS increase 5% by expiration we will profit 16.2% or $315. If CVS increases 10% by expiration we will profit 34% or $660, and if CVS increases 15% by expiration we will profit 51.8% or $1,006. 4

5 The last profit opportunity we'll look at this week is ADS (Alliance Data Systems): Alliance Data Systems offers marketing and loyalty solutions primarily in North America. Over the past several years the company has consistently increased their Revenue, Equity, and Retained Earnings. The stock is in a clear uptrend and seems to be on its way back up after recently retracing below the middle Keltner Channel. Taking a closer look at the stock through a shorter 2-hour period reveals a possible MACD (24,52,18) crossover: 5

6 We can see that the previous 2 MACD crossovers produced nice rallies in the weeks that followed. If this pattern holds, we could be looking at similar gains in future weeks, making this a good entry point for a February 2014 call option purchase on ADS. 6

7 Note: Profit performance displayed in this newsletter does not include transaction Costs. This newsletter includes some trading ideas following Chuck Hughes trading strategies along with educational information. For a complete listing of Chuck s exact trades, including specific entries and exits and real time Portfolio tracking, please call Brad at or Cash Cow Newsletter Archive Click on the link provided below to access the Cash Cow Archive. Cash Cow Newsletter Archive: 7

Cash Cow Newsletter April

Cash Cow Newsletter April 9 2014 In this week s Cash Cow newsletter I would like to start by looking at the recent performance of the S&P 500 Index: The S&P 500 has begun to recover since the drop experienced