Optioneering Newsletter Apr 22

Optioneering Newsletter
April 22, 2018
Mini Dow Futures Monthly
We trade with the trend and the long-term trend is up. The bears have had
the momentum recently. The pullback is expected to be followed by a
continued bull trend.
The first profit opportunity we will consider this week is in ANET, or Arista
Networks, Inc. Arista Networks was founded to pioneer and deliver software-
driven cloud networking solutions for large data center storage and computing
environments.
ANET Monthly
The monthly chart shows that ANET has been going almost straight up since
the 2016 low. The current pullback is expected to yield to a further advance.
ANET Daily
ANET hit a new record high in February. New record highs are bullish. The
current pullback gives us a buying opportunity.
We are going to review a Call Debit Spread for ANET.
Traders who want a more leveraged approach could consider buying ANET
calls. ANET has options expiring every week until June 1st. After that, ANET
has options expiring in mid-June, September, December, January 2019, and
January 2020.
Buy to Open ANET May 18th 220-strike Call
Sell to Open ANET May 18th 250-strike Call
We can see from the Call Option Spread Analysis Calculator that if the ANET
stock price declines by -2.5%, stays the same as it is now, or increases in
price when the options expire, the spread will show a profit of 38.6% or $835.
IF ANET is down 5% when the options expire, the profit will be 27.6% or $597.
If ANET is down -7.5% when the options expire, the spread will lose -2.5% or
-$55.
The next profit opportunity we will review this week is in CRSP, or CRSPR
Therapeutics AG. CRISPR Therapeutics is a gene-editing company. CRSPR is
focused on the development of transformative gene-based medicines for
serious diseases using its proprietary CRISPR/Cas9 gene-editing platform.
CRSP Weekly
The weekly chart shows that CRSP hit a new record high last month. New
record highs are bullish. This month’s higher low bottom setup points to a
further advance.
CRSP Daily
The daily chart also shows that CSP hit a new record high last month. The
pullback from this month’s high gives us a new buying opportunity.
We are going to review a Call Debit Spread for CRSP.
Traders who want a more leveraged approach could consider buying CRSP
calls. CRSP has options expiring in May, June, July, and October.
Buy to Open CRSP May 18th expiration 40-strike Call
Sell to Open CRSP May 18th expiration 50-strike Call
We can see from the Call Option Spread Analysis Calculator that if the
CRSP stock price declines by -7.5%, stays the same as it is now, or
increases in price at option expiration, the spread will show a profit of 31.6%
or $240.
The next profit opportunity we will consider this week is in RH, or Restoration
Hardware. RH is an American home-furnishings company headquartered in
Corte Madera, California. RH sells its merchandise through its retail stores and
catalogs and online.
RH Monthly
The monthly chart shows that RH has been very bullish since last year’s low.
Last month’s bullish trading suggests that the pullback from the December
record high is over and the uptrend is resuming.
RH Daily
As we said above, RH hit a new record high in December. New record highs
are bullish. The pullback to the Mid-Line of the Keltner Channel gives us a
buying opportunity.
We are going to review a Call Debit Spread for RH.
Traders who want more leverage can buy RH calls. RH has options expiring
every week until June 1st. After that, RH has options expiring in mid-June,
August, November, January 2019, and January 2020.
Buy to Open RH June 1st expiration 75-strike Call
Sell to Open RH June 1st expiration 85-strike Call
We can see from the Call Option Spread Analysis Calculator that if the RH
stock price declines by -2.5%, stays where it is, or increases in price when the
options expire, the spread will make a 42.9%, or $300 profit. If RH is down -5%
when the options expire, there will be a 28.3% or $198 profit. If RH is down
-7.5% when the options expire, the spread will lose -3.3% or -$23.
The last profit opportunity we will review this week is in URTY. URTY is the
ProShares UltraPro Russell 2000 ETF. URTY seeks to achieve daily results
that are 300% of the performance of the Russell 2000 Small Cap Index.
URTY Monthly
The monthly chart shows that URTY has been in a strong bull trend since
the 2016 low. This month’s trading suggests that a run to new highs could
be imminent.
URTY Daily
The daily chart clearly shows that the trend is up. The pullback toward the
Mid-Line of the Keltner Channel gives us a buying opportunity.
URTY is a leveraged ETF. While leveraged ETFs contain more risk, they
usually possess higher premiums as a result. We suggest taking advantage
of the high premiums offered by initiating call debit spreads.
Traders who want a more leveraged approach could consider buying URTY
calls. URTY has options expiring in May, June, July, August, and November.
Buy to Open URTY June 15th expiration 70-strike Call
Sell to Open URTY June 15th expiration 80-strike Call
We can see from the Call Option Spread Analysis Calculator that if the
URTY ETF price declines by -5%, stays the same as it is now, or increases
at all when the options expire, the spread will make a 29% or $225 profit. If
URTY is down -7.5% at expiration, the spread will make 3.8% or $29.
EARNINGS SEASON: There are four “Earnings Seasons” a year. The

seasons begin in January, April, July, and October and they each last
about two months. The earnings reports can have an impact on the stock
price. We don’t know if the impact is going to be positive or negative (or
nothing at all). It’s up to you to decide if you want to be in a trade when the
earnings report is announced. Here’s a link for a page that can help you
keep track of the report dates:
https://www.earningswhispers.com/calendar
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

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Optioneering Newsletter

April 22, 2018

Mini Dow Futures Monthly

We are going to review a Call Debit Spread for ANET.

We are going to review a Call Debit Spread for CRSP.

We are going to review a Call Debit Spread for RH.

EARNINGS SEASON: There are four “Earnings Seasons” a year. The

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