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    2023 Oct 05

    Uploaded by

    Alejandro Mufardini
    This document provides analysis of four profit opportunities including buying shares of EXEL stock, purchasing a call option on INFY, entering a call debit spread on NVDA, and entering a call debit spread on POWL. Charts and calculations are presented for each opportunity showing the rationale.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    2023 Oct 05

    Uploaded by

    Alejandro Mufardini
    4 views7 pages
    This document provides analysis of four profit opportunities including buying shares of EXEL stock, purchasing a call option on INFY, entering a call debit spread on NVDA, and entering a call debit spread on POWL. Charts and calculations are presented for each opportunity showing the rationale.

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    © © All Rights Reserved

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    This document provides analysis of four profit opportunities including buying shares of EXEL stock, purchasing a call option on INFY, entering a call debit spread on NVDA, and entering a call debit spread on POWL. Charts and calculations are presented for each opportunity showing the rationale.

    Copyright:

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

    2023 Oct 05

    Uploaded by

    Alejandro Mufardini
    This document provides analysis of four profit opportunities including buying shares of EXEL stock, purchasing a call option on INFY, entering a call debit spread on NVDA, and entering a call debit spread on POWL. Charts and calculations are presented for each opportunity showing the rationale.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 7

    October 5th,

    2023
    Edition

    SPX Monthly Chart


    On September 30th,
    the S&P posted
    another end of the
    month close above the
    monthly moving
    average line. This
    keeps the bullish
    overall market trend
    intact.
    Today will look at one
    stock purchase, a call
    purchase, and two
    option debit spreads.

    EXEL
    The first profit opportunity we will review is EXEL, or Exelixis, Inc. EXEL is an
    oncology-focused biotechnology company that primarily focuses on the discovery,
    development, and commercialization of new drugs against cancers.
    EXEL Monthly Chart
    WT
    The monthly chart
    shows that EXEL has
    been above the moving
    average line since
    March. If the stock price
    is above the moving
    average line, the trend is
    up.
    EXEL Daily Chart

    The daily chart shows that


    EXEL was very bullish from
    August 1st until September
    1st. The dip back inside the
    Keltner Channel gives us a
    buying opportunity.

    We recommend buying
    EXEL stock at the current
    price level.

    INFY
    The next profit opportunity we will review this week is a Call Option purchase in INFY,
    or Infosys Limited. INFY is an information technology company that provides business
    consulting, information technology and outsourcing services.
    INFY Monthly Chart

    A slide until April 2023


    pushed INFY stock lower
    before bullish pressure
    resumed. INFY is back
    above the moving average
    line and back in a
    confirmed bull trend.
    The daily chart shows that the INFY stock price has been rising since the chart
    started. The next target is 25.

    INFY Daily Chart


    As we said above, we want
    to buy a call in INFY. We will
    first look at selecting a call
    option strike price for
    purchasing an INFY Call.
    INFY is currently trading at
    17.61. Let’s look at buying
    the INFY October 20 16-
    strike call. The October 20
    options expire in 15 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 0.14 points (boxed in red). The time value of .14 is less
    than 1% of the 17.61 stock price, so this strike price qualifies under the 1% Rule.
    The second row from
    bottom of the calculator
    Buy to Open the INFY Oct 20 16-Strike Call lists the dollar profit
    potential. The bottom row
    lists the percent return
    profit potential. We can see
    that if the INFY stock price
    increases 1% at option
    expiration (boxed in green)
    a 2.1% or $4 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 INFY Oct 20 16-Strike Call
    profit potential of a Call
    Option purchase if the
    underlying stock •
    continues to increase in
    price. If INFY increases
    10% between now and
    option expiration, the Call
    Option Purchase
    Calculator shows that the
    16-strike call will realize a
    92.6% or $162 profit
    (boxed in green).
    On the other hand, if INFY remains flat at option expiration, the 16-Strike Call will only
    lose -8% or -$14. 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 INFY Oct 20 16-Strike Call at the current price level.

    NVDA
    The next profit opportunity we will review is in NVDA, or NVIDIA Corporation. NVDA
    is a worldwide leader in visual computing technologies and the inventor of the graphic
    processing unit, or GPU.
    NVDA Monthly Chart

    The monthly chart shows


    that NVDA rocketed from
    below 125 to over 500
    since the chart started in
    2022. The next targets are
    525 and 550.
    NVDA Daily Chart
    The daily chart shows the
    strong bull move since the
    chart started. The recent dip
    is expected to be followed by
    a further advance.
    We are going to review a Call
    Debit Spread trade for NVDA.
    Traders who want a more
    leveraged approach can buy
    NVDA calls.

    Buy to Open the NVDA Nov 17 400-Strike Call


    Sell to Open the NVDA Nov 17 410-Strike Call
    We can see from this
    Call Option Spread
    Analysis that if the
    NVDA stock price
    declines by -7.5%,
    remains flat, or
    increases in price
    when the options
    expire, when the
    options expire, the
    spread will make a
    30.7 or $235 profit.
    That’s the same
    profit with a 7.5%
    swing in either
    direction!

    POWL
    The last profit opportunity we will review is in POWL, or Powell Industries Inc. POWL
    is a manufacturer of Integrated/Packaged Solutions and Electrical Equipment to
    monitor and control the distribution of electrical power in commercial and industrial
    markets.
    POWL Monthly Chart

    The monthly chart shows that


    POWL soared from about 25 in
    December to 90 in August. The
    next target is 100.

    POWL Daily Chart


    The daily chart shows that
    POWL had a big gap up on
    August 2. There’s an old
    market adage that says to trade
    in the direction of wide range
    gaps, especially when they are
    in synch with the trend.
    We are going to review a Call
    Debit Spread trade for POWL.
    Traders who want a more
    leveraged approach can buy
    POWL calls.

    Buy to Open the POWL Nov 17 70-Strike Call


    Sell to Open the POWL Nov 17 75-Strike Call

    We can see from this Call


    Option Spread Analysis that if
    the POWL stock price declines
    by -7.5%, remains flat, or
    increases in price when the
    options expire, when the
    options expire, the spread will
    make a 51.5% or $170 profit.
    Join Chuck’s Lightning Trade Alert!

    * Lightning Trade Alert trading program provides a training package and specific trade signals for one year.
    First 10 people to sign up each day this offer is valid will get a waiver of the standard fee, which is the price
    charged to anyone signing up after the first 10 people per day. Additional costs apply to different programs.
    Trading incurs risk and you may lose money trading.

    This week we recommended the following:


    Buy EXEL Stock
    Buy to Open the INFY Oct 20 16-Strike Call
    Buy to Open the NVDA Nov 17 400-Strike Call
    Sell to Open the NVDA Nov 17 410-Strike Call
    Buy to Open the POWL Nov 17 70-Strike Call
    Sell to Open the POWL Nov 17 75-Strike Call

    Note: Profit performance displayed in this newsletter does not include


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

    Good Trading and


    we’ll see you next
    week!

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