Tuesday, July 27th, 2021
Happy Thankful Tuesday!
I am excited to share that you don’t need special education or to sit in front of the computer all day to trade options. It can be easily learned if you are interested in spending an hour or so a week earning money in what could be considered “renting” stocks for a short period of time.
This is why I show you the details about an equity’s symbol and pattern each week.
In fact, below you will see some previous trades that brought in 230% and 264%.
For the updates on previously discussed symbols, please scroll down.
I am typing this on Sunday, before the new week starts. Last week, the Dow was up 4 days out of 5 and it finally caught up to the other indices and hit and all-time high. It didn’t close at the high, but it touched it and pulled a little by close. The Summer months are often a quiet market time with slight pullbacks and then it recovers into the end of the year. We have been heading up for months and a pullback is due. We are in a wait and see mode.
For today’s Trade of the Day, we will be looking at salesforce.com, inc., Inc. symbol (CRM).
Before analyzing CRM’s chart, let’s take a closer look at the company and its services.
salesforce.com, inc. develops enterprise cloud computing solutions with a focus on customer relationship management worldwide. The company offers Sales Cloud to store data, monitor leads and progress, forecast opportunities, and gain insights through analytics and relationship intelligence. Additionally, the company offers various solutions for financial services, healthcare and life sciences, manufacturing, consumer goods, government, and philanthropy.
The company was founded in 1999 and is headquartered in San Francisco, California.
Each candle on the chart represents price movement over a 5-day (week) period. The indicator at the bottom of the chart is a Channel Commodity Index (CCI).
I drew a line below the candles, if price stays above that line, the upward trend should continue. Watch for a continued rise toward its target.
A cross down through the CCI zero or -100 line is bearish, in that it is suggesting price has gone from bearish to even more bearish. A cross up through the zero line and a cross through 100, suggests price is bullish. If you want to learn more about the CCI, you can read through the short section below or you can scroll down to the alert signal.
Channel Commodity Index
A cross up and over the CCI -100 or the zero line can issue an entry signal as it moves from being bearish to bullish. A rise toward 100 is a continuation of that bullishness. Up through the 100 line creates a green fin of bullishness, until it drops back down through the 100-line.
Also, a pullback and then, as it heads back up is another bullish indicator.
A break below the zero line means it has gone from bullish to bearish and a drop below -100 suggests even more bearishness.
The Commodity Channel Index (CCI) is a versatile indicator that can be used to identify a new trend or warn of extreme conditions. Originally, it was developed to identify cyclical turns in commodities, but the indicator can be successfully applied to indices, ETFs, stocks and other securities. In general, CCI measures the current price level relative to an average price level over a given period. CCI is relatively high when prices are far above their average but is relatively low when prices are far below their average. In this manner, CCI can be used to identify overbought and oversold levels or breaks from one level to another.
Check Out How This Rise in Price Could Pay Out Big Time
CRM is bullish as it rises further above the zero line and back toward 100. This week’s candle is apt to continue its upward movement that could take it higher. We are looking for a continued rise toward a price of $260 and then higher to $270.
If you find that you like the CCI Indicator as an easy-to-read indicator, it is included in the 5-Star Academy educational program which includes a chatroom where I am during the day to do live teaching sessions on M-W-F and to answer questions during the day. It is an incredibly supportive community.
Potential Profit Play for CRM
CRM’s price pulled back two weeks and it is starting a new upward move. I am writing this on Sunday, if price continues to rise when you receive this on Tuesday, you could consider a call option trade. We are expecting the CCI indicator to rise above the 100 line and head up.
Price is currently at approximately $248.50 as I write over the weekend and is expected to continue heading up to, perhaps, $260 and then high to maybe $270.
If the CCI line rises above to the 100 line and then, continues up, price will continue its current uptrend and continue to rise. We will keep an eye on it over the course of the next few weeks.
The short-term price target for CRM is $260 and, perhaps, higher to $270.
To buy shares of salesforce.com (CRM) stock today would cost approximately $248.50 per share
I am suggesting that the price of CRM may rise to $260.
Option trading offers the potential of a lower initial investment and higher percentage gain. It is like renting stock versus buying out right. Let’s take a look.
If you bought 2 shares of CRM at $248.50 and it increased in price to $260, it would result in a profit of $11.50 or $23 for 2 shares or a 4.6% gain.
If you bought one Call option contract covering 100 shares of CRM’s stock with an August 20th (Aug 21) expiration date for the 260 strike, the premium would be approximately 2.30 per share or a total of $230 for the contract of 100 shares. If price increased the expected $11.50 over the next few weeks to $260 target, the premium would increase approximately $8 to $11.30. This is a gain of $800 on your $230 investment or 348% profit. That would be a terrific trade!
It is exciting to make money if price rises or falls.
I want to remind you that you can sell to close and take profit any time along the line before the expiration date. You don’t have to hold the contract until expiration.
Options often offer a smaller overall investment, covering more shares of stock and potential for greater profits. This is like renting stocks versus having to pay full price to buy.
This said, if you are having any kind of trouble taking advantage of these trades, we don’t want you to miss out. I have put together programs that help traders just like you access the potential profits that options provide. Be sure to check out the programs (like 5-Star Academy mentioned earlier) shared in this email and we will make it easy for you to get your share.
I love to trade, and I love to teach. It is my thing.
PS-I have created this daily letter to help you see the great potential you can realize by trading options. Being able to recognize these set ups are a key first step in generating wealth with options. Once you are in a trade, there is a huge range of tools that can be used to manage the many possibilities that can present themselves. If you are interested in learning how to apply these tools and increase the potential of each trade, click here to learn more.
Previous Equities discuss:
Four weeks ago, we looked at First Solar (FSLR) with July 30th expiration and 95 strike. It moved higher to 94.08 and the entry premium of 2.95 went as high as 4.50 or a profit of 1.55 or $155 and then pulled back. It dropped a little more last week.
Three weeks ago, we went over Pinterest (PINS) with a July 30th expiration and 85 strike. It went as high as 81.77 and then pulled back. The premium was 3.15. It went as high as 3.90 and pulled back. Last week, it recovered a large portion of the pullback by rising 11.9% to 76.91. Its current premium is 1.92, up from where it was. It still has a way to do to be profitable and time is getting short.
Two weeks ago, we zeroed in on Starbucks (SBUX) with an August 6th expiration and 120 strike and a premium of 2.06. It went as high as 6.80 on Friday. That is a TERRIFIC 230% gain in two weeks.
Last week we looked at a Put option on UBER with a July 30 expiration and a strike of 44 with an ask premium of .55. Price dropped as low as 44.44 with a premium of 2.00 or 264% gain and then, the equity’s price rose and premium dropped to 1.04 on Friday which is still an 89% profit.