Tuesday, September 21st 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.
I am typing this on Sunday, before the new week starts. Last week, the Dow was down 3 days out of 5. It dropped to a support level (floor) that has held since late last year. For the last 6 days, it has been up and down at the level of about 34,585. It will be interesting to see if it holds here on this bearish pullback.
For the updates on previously discussed symbols, please scroll down.
For today’s Trade of the Day, we will be looking at Palantir Technologies, Inc., symbol (PLTR)
Before analyzing PLTR’s chart, let’s take a closer look at the company and its services.
Palantir Technologies Inc. builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations. The company provides Palantir Gotham, a software platform for government operatives in the defense and intelligence sectors, which enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform. It also offers a platform that transforms the ways organizations operate by creating a central operating system for their data; and allows individual users to integrate and analyze the data they need in one place.
Palantir Technologies Inc. was founded in 2003 and is headquartered in Denver, Colorado.
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
PLTR is bullish as it rises again further above the 100 line. This week’s candle is apt to continue its upward movement that could take it higher. We are looking for a continued rise above the CCI 100 line and up to a price of $34 and then higher. The target is $34.
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 PLTR
PLTR’s price continues to move up. I am writing this on Sunday, if price continues to rise above 100 when you receive this on Tuesday and price is above 29, you could consider a call option trade. We are expecting the CCI indicator to continue rising further above the 100 line.
Price is currently at approximately $29 as I write over the weekend and is expected to continue heading up to $32 perhaps, hitting the target of $34 and then higher.
If the CCI line stays above 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 PLTR is $34 and, perhaps, higher.
To buy shares of Palantir (PLTR) stock today would cost approximately $29 per share.
I am suggesting that the price of PLTR may rise to $34.
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 20 shares of PLTR at $29, total investment $580 and it increased in price to $34, it would result in a profit of $5 or $100 for 20 shares or an 17% gain.
If you bought one Call option contract covering 100 shares of PLTR’s stock with a Oct 8th (Oct wk2) expiration date for the 34 strike, the premium would be approximately .24 per share or a total of $24 for the contract of 100 shares. If price increased the expected $5 over the next few weeks to $34 target, the premium would increase approximately $3.00 to $3.24. This is a gain of $300 on your $24 investment or 1500% 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.
Yours for a prosperous future,
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:
Two weeks ago, we discussed FSLR and a 105 strike with an Oct 1st (Oct wk1) expiration and a premium of 1.24. It hit 107.50 and its premium rose to 2.95 or a gain of 1.71 or 73% profit. Nice trade!
To see other past trades, visit our site https://www.tradewinsdaily.com/category/daily-profit-play/