Dear Reader,

You need to see this trade set up that I found today. Although you might be familiar with this company, you might not be as familiar with its stock chart.

The set up is for Visa Inc., stock symbol V. Visa Inc. operates as a payment technology company in the United States and internationally. The company operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions.

Check out this chart.

The “Buy Zone”

Our team uses the Keltner Channels as an indicator to determine if a stock is in the Keltner Channel “Buy Zone”.

The Keltner Channel “Buy Zone” occurs when a stock is trading below the upper Keltner Channel. Once the daily price is trading below the upper channel, it provides a lower risk buying opportunity as the stock is likely to rally.

Supercharge Potential Returns

Now, since V stock is trading below the upper Keltner Channel in the Keltner Channel ‘Buy Zone’ this offers a prime trade entry opportunity. Let’s use the Hughes Optioneering calculator to look at the potential returns for a V call option purchase.

When you purchase a call option, there is no limit on the profit potential of the call if the underlying stock continues to move up in price.

For this specific call option, the calculator analysis below reveals if V stock increases 5.0% at option expiration to 281.34 (circled), the call option would make 66.2% before commission. 

If V stock increases 10.0% at option expiration to 294.73 (circled), the call option would make 137.3% before commission and outperform the stock return more than 13 to 1*. 

The leverage provided by call options allows you to maximize potential returns on bullish stocks.

The prices and returns represented below were calculated based on the current stock and option pricing for V on 1/26/2024 before commissions.

Keep an eye on your inbox for other set ups.

Wishing You the Best in Investing Success,

Chuck Hughes

Editor, Trade of the Day

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*Trading incurs risk and some people lose money trading.