Cash Cow Newsletter March

Transcription

1 Cash Cow Newsletter March In this week s Cash Cow newsletter we are going to start by reviewing the recent action in the S&P 500 Index and then we will look at several new profit opportunities. The $SPX sold off this week, dropping -3.04% since last Thursday: The index closed below the lower Keltner Channel today. This could be a good buying opportunity should the index resume its uptrend. We should remain cautious and use mostly spread strategies for this week s profit opportunities in case the index continues to correct. 1

2 The first profit opportunity we ll look at is HD (Home Depot): We have looked at Home Depot several times in the past due to the stock s notable price appreciation and the company s financials. Today the stock retraced to the middle Keltner Channel. We should consider initiating a Market Neutral spread on this stock to take advantage of future price appreciation while limiting our downside risk. At current prices the HD Apr /115-strike Market Neutral spread has an unlimited profit potential with a maximum risk of -13.4% or -$232. 2

3 Buy to Open HD Apr strike call Buy to Open HD Apr strike put We can see from this analysis that if HD increases 10% by expiration we would profit 40.7% or $706, and we would continue to profit as HD continued to increase in price. If HD decreases -20% by expiration we would profit 41.7% or $722. Those wanting a more leveraged approach could purchase a weekly call option on HD for the March 20 th expiration. 3

4 The next profit opportunity we ll look at this week is CURE (Healthcare Bull 3x ETF): We have also looked at CURE a few times in the past due to the high premiums offered. The ETF recently dropped below the middle Keltner Channel. We should consider initiating a call option debit spread on this ETF to take advantage of future price gains. At current prices the CURE May /131-strike call option spread has a 38.8% or $475 profit potential. 4

5 Buy to Open CURE May strike call Sell to Open CURE May strike call We can see from this call option spread analysis that if CURE decreases -2.5%, remains flat, or increases at all in price by expiration we would profit 38.8% or $475. If CURE decreases - 5% we would profit 30% or $367. If CURE decreases -7.5% we would still profit 2.1%. 5

6 The next profit opportunity we'll look at this week is PANW (Palo Alto Networks): Palo Alto Networks provides enterprise security platforms to enterprises, service providers, and government entities worldwide. The stock recently retraced to the middle Keltner Channel after rallying for over a month. We should consider purchasing a call option on PANW for the March 20 th expiration. 6

7 The last profit opportunity we ll look at this week is AAPL (Apple): We have looked at Apple many times before because of the stock s price appreciation and the excellent financials that the company has achieved. The stock has recently retraced near the lower Keltner Channel, offering us a good buying opportunity. We should consider initiating a call option debit spread on this stock. At current prices the AAPL May /120-strike call option spread has a 36.5% or $401 profit potential. 7

8 Buy to Open AAPL May strike call Sell to Open AAPL May strike call We can see from this call option spread analysis that if AAPL remains flat or increases at all in price by expiration we would profit 36.5% or $401. If AAPL decreases -2.5% we would profit 29.1% or $319. If AAPL decreases -5% we would still profit 1.3%. Those wanting a more leveraged approach could purchase a weekly call option on AAPL for the March 20 th expiration. 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: 8