For today’s Trade of the Day, we will be looking at ConocoPhillips symbol (COP).

Before analyzing COP’s chart, let’s take a closer look at the stock and its services.

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids worldwide. It primarily engages in the conventional and tight oil reservoirs, shale gas, heavy oil, LNG, oil sands, and other production operations. The company’s portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; various LNG developments; oil sands assets in Canada; and an inventory of conventional and unconventional exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.

The chart of COP below is a weekly chart with a CCI indicator at the bottom.  The description coming up next explains how to use the CCI.

Channel Commodity Index

Stockcharts.com provides a great definition of the Commodity Channel Index (CCI), which 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.

A move down to the CCI -100 or the zero line can issue a Put entry signal as it moves from being bullish to bearish. A move toward -100 is a continuation of that bearishness.  Up through the 100 line creates a green fin of bullishness until it drops down through the -100 line.

A break below the zero line means it has gone from bullish to bearish and a drop below -100 suggests even more bearishness.

How would you like to turn $2.73 per day into a potential 6-figure income? Click here for details

On the CCI indicator below the COP chart, notice how the line is heading to the 100 line going into bullish territory.  This signals bullish moves with the thought that price may move up.

COP’s Potential Trade

Please note and remember that I am typing this on Monday, two days before you receive it. The information I am sharing could change over those two days and is intended to share the opportunities that options offer us.

 We want the CCI to go up to create a fin shape. We also want the price to go up to at least $111 before entering a trade. The first target would be $117.

Check Out How an Option Trade Could Pay Out Big Time

To buy stock shares of COP today, price would be approximately $110.63. If price rose to $117 you would make $6.37.

This said, option trading offers the potential of a smaller initial investment and higher percentage gain even when price is expected to rise or fall. Let’s take a look.

If you bought one Call option contract covering 100 shares of COP’s stock with an October 21st expiration date for the 117 strike, premium would be approximately $ .78 today, or a total of $78 per contract.  If the stock price rose the expected $6, the premium might increase approximately $3.00 to $3.78 per share on your 100-share contract. This is a 384% gain over a couple weeks.

For updates on previous potential trades we have discussed, scroll to the bottom of this message.

Remember you can close an option trade anywhere along the line before expiration to take gains or stop a loss.

Options can offer a win, win, win trade opportunity. They often offer a smaller overall investment, covering more shares of stock, and potentially offer greater profits.

I love to trade, and I love to teach.  It is my thing.

I wish you the very best,

Wendy

When things get wild it is even more important to control risk and maximize you gains. Click here for a method that offers the greatest potential.

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 throughout the trade to earn and take profit or prevent a loss. Lots of fun things to learn and fine-tune.

Past potential trade update:

Two weeks ago, we looked at buying DIS puts. On 9-21 the premium for the Oct 21st 100 put was $2.60. As of 9-30 the premium is $6.75 which is an 160% profit.

Last week we discussed buying LOW 175 puts with an Oct 21st expiration date. On 9-28 the premium was $1.88 and on 9-30 it was $2.52, a 34% profit.