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    2024 Mar 21

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    Alejandro Mufardini
    The document provides analysis and recommendations for profit opportunities in four stocks and ETFs: DAVE, MPLX, CVNA, and VKTX. For each, it reviews monthly and daily charts showing trends and signals, then recommends either buying stock, buying calls, or entering call debit spreads to profit from anticipated price increases.

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    2024 Mar 21

    Uploaded by

    Alejandro Mufardini
    8 views7 pages
    The document provides analysis and recommendations for profit opportunities in four stocks and ETFs: DAVE, MPLX, CVNA, and VKTX. For each, it reviews monthly and daily charts showing trends and signals, then recommends either buying stock, buying calls, or entering call debit spreads to profit from anticipated price increases.

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    The document provides analysis and recommendations for profit opportunities in four stocks and ETFs: DAVE, MPLX, CVNA, and VKTX. For each, it reviews monthly and daily charts showing trends and signals, then recommends either buying stock, buying calls, or entering call debit spreads to profit from anticipated price increases.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    8 views7 pages

    2024 Mar 21

    Uploaded by

    Alejandro Mufardini
    The document provides analysis and recommendations for profit opportunities in four stocks and ETFs: DAVE, MPLX, CVNA, and VKTX. For each, it reviews monthly and daily charts showing trends and signals, then recommends either buying stock, buying calls, or entering call debit spreads to profit from anticipated price increases.

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    © All Rights Reserved
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    You are on page 1of 7

    March 21st,

    2024
    Edition

    SPX Monthly Chart


    On February 29th, the
    S&P posted another
    end of the month
    close above the 10-
    month moving
    average line. This
    shows the continued
    bullish signal.
    Today will look at one
    stock purchase, a call
    purchase, and two
    option debit spreads.

    DAVE
    The first profit opportunity is a stock purchase in DAVE, or Dave, Inc. Dave is a digital
    banking platform designed to help consumers avoid steep overdraft fees.

    DAVE Monthly Chart


    WT
    The monthly chart
    shows that DAVE closed
    above the moving
    average line and gave us
    the current buy signal in
    December at a price of
    about 8. This month
    DAVE was over 42.50.
    DAVE Daily Chart

    The daily chart shows that


    DAVE has been heading
    higher since the chart
    started in November. The
    pullback from this month’s
    high gives us a buying
    opportunity.
    We recommend buying
    DAVE stock at the current
    price level.

    MPLX
    The next profit opportunity we will review this week is a Call Option purchase in
    MPLX, or MPLX LP. MPLX is a master limited partnership engaged in providing a wide
    range of midstream energy services, including fuel distribution solutions.
    MPLX Monthly Chart

    The monthly chart shows


    that MPLX has been rising
    steadily since it closed
    above the moving average
    line and activated the
    current buy signal in
    October 2022. There are no
    signs of a peak in the
    movement.
    The daily chart shows that MPLX has been primarily trading inside the Upper Keltner
    Channel for nine months. That’s an exceptional sign of strength!

    MPLX Daily Chart


    As we said above, we want
    to buy a call in MPLX. We
    will first look at selecting a
    call option strike price for
    purchasing an MPLX Call.
    MPLX is currently trading at
    40.67. Let’s look at buying
    the MPLX April 19 35-strike
    call. The April 19 options
    expire in 28 days.

    The Call Option Purchase calculator will calculate the profit potential for a call option
    purchase trade based on the price change in the underlying stock/ETF at option
    expiration in this example from a 12.5% change in stock price to a flat stock price.
    We developed what we call the 1% Rule to help us select an option strike price. The 1%
    rule says to limit the time value portion of the option to less than 1% of the stock/ETF
    price. If you limit the time value portion of an option to 1%, the stock price only
    has to move 1% for the option contract to break even and start profiting.
    The calculator will also calculate the time value portion of an option. With this option
    purchase, the time value is 0.13 points (boxed in red). The time value of .13 is less
    than 1% of the 40.67 stock price, so this strike price qualifies under the 1% Rule.

    Buy to Open the MPLX Apr 19 35-Strike Call The bottom row lists the
    percent return profit
    potential. We can see that if
    the MPLX stock price
    increases 1% at option
    expiration (boxed in green)
    a 4.8% or $28 profit will be
    realized. This confirms the
    1% Rule of at least breaking
    even or profiting with only
    a 1% increase in the stock
    price.
    There is no limit on the Buy to Open the MPLX Apr 19 35-Strike Call
    profit potential of a Call
    Option purchase if the
    underlying stock/ETF •
    continues to increase in
    price. If MPLX increases
    10% between now and
    option expiration, the Call
    Option Purchase
    Calculator shows that the
    35-strike call will realize a
    67.9% or $394 profit
    (boxed in green).
    On the other hand, if MPLX remains flat at option expiration, the 35-Strike Call will
    only lose -2.2% or -$13. Remember, if you purchase an at-the-money or out-of-the-
    money option and the underlying stock/ETF is flat or down at option expiration, it
    could result a 100% loss for your option trade! Using the 1% Rule to select an option
    strike price can increase your percentage of winning trades compared to trading at-
    the-money or out-of-the- money strikes and this higher accuracy can make you a
    more successful trader.
    We recommend buying the MPLX Apr 19 35-Strike Call at current prices.

    CVNA
    The next profit opportunity we will review this week is a Call Debit Spread in CVNA, or
    Carvana Co. This is a car retailer best known for their multi-story car vending
    machines.

    CVNA Monthly Chart

    The monthly chart shows


    that CVNA has been above
    the moving average line
    since May 2023. In this
    trend, the bullish
    movement continues.
    CVNA Daily Chart
    The daily chart shows that
    CVNA has been forming a
    pattern of higher highs and
    higher lows since the chart
    started last May. The bullish
    pattern points to a further
    advance.
    We are going to review a Call
    Debit Spread trade for CVNA.
    Traders who want a more
    leveraged approach can buy
    CVNA calls.

    Buy to Open the CVNA May 17 65-Strike Call


    Sell to Open the CVNA May 17 75-Strike Call
    We can see from this
    Call Option Spread
    Analysis that if the
    CVNA stock price
    declines by -7.5%,
    remains flat, or
    increases in price
    when the options
    expire, the trade will
    make a 47.7% or $323
    profit. That’s the
    same profit with a
    7.5% swing in either
    direction!

    VKTX
    The last profit opportunity we will review is in VKTX, or Viking Therapeutics, Inc.
    VKTX is a biopharmaceutical company. The company is engaged in the development
    of novel therapies for metabolic and endocrine disorders.
    VKTX Monthly Chart

    The monthly chart shows


    VKTX closed above the moving
    average line and gave us the
    current buy signal in
    December. Since then, the
    stock price has rocketed from
    about 20 to 100.

    The daily chart shows that VKTX Daily Chart


    VKTX had a big gap up on
    February 27. There’s an old
    market adage that says to trade
    in the direction of wide range
    gaps, especially when they’re in
    synch with the trend.
    We are going to review a Call
    Debit Spread trade for VKTX.
    Traders who want a more
    leveraged approach can buy
    VKTX calls.

    Buy to Open the VKTX Apr 19 50-Strike Call


    Sell to Open the VKTX Apr 19 60-Strike Call

    We can see from this Call


    Option Spread Analysis that if
    the VKTX stock price declines
    by -5%, remains flat, or
    increases in price when the
    options expire, the spread will
    make 51.5% or $340. If VKTX
    is down -7.5% at expiration,
    the trade will still make 51.5%
    or $340.
    Want to Learn More from Chuck
    Hughes? Click the Banner Below

    This week we recommended the following:


    Buy DAVE Stock
    Buy to Open the MPLX Apr 19 35-Strike Call
    Buy to Open the CVNA May 17 65-Strike Call
    Sell to Open the CVNA May 17 75-Strike Call
    Buy to Open the VKTX Apr 19 50-Strike Call
    Sell to Open the VKTX Apr 19 60-Strike Call

    Note: Profit performance displayed in this newsletter does not include


    commission cost. Prices are based on Thursday End of Day.

    We’ll see you next


    week!

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