Cash Cow Newsletter March 11 2015 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
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 2015 100/115-strike Market Neutral spread has an unlimited profit potential with a maximum risk of -13.4% or -$232. 2
Buy to Open HD Apr 2015 100-strike call Buy to Open HD Apr 2015 115-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
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 2015 114/131-strike call option spread has a 38.8% or $475 profit potential. 4
Buy to Open CURE May 2015 114-strike call Sell to Open CURE May 2015 131-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
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
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 2015 105/120-strike call option spread has a 36.5% or $401 profit potential. 7
Buy to Open AAPL May 2015 105-strike call Sell to Open AAPL May 2015 120-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 1-866-661-5664 or 310-647-5664. Cash Cow Newsletter Archive Click on the link provided below to access the Cash Cow Archive. Cash Cow Newsletter Archive: http://weeklyoptiontrade.com/archive.html 8