Take a look at this example of a trade I just spotted. Finding great bargains that are overbought or oversold doesn’t have to be as hard as it may seem. Let me show you what I noticed on a chart of United APA Corp. (APA).

Be sure to check out the update on a previous trade at the bottom of this message.

On the chart below, I included the Channel Commodity Index indicator which I use to help me spot powerful reversals that are setting up. If you want more information on the CCI click here.

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On the CCI at the bottom of the chart you’ll see highlighted areas that look like fins. These tell us there is a high likelihood that the price is heading up.

In this example we want CCI on APA to go up to create a clear fin shape. We also want the price to stay above $33 before entering a trade. The first target would be $45.

To buy stock shares of APA today, price would be approximately $33.91. If price went to $45 you would make about $11.09.

That 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 APA with an April 19th expiration date for the 34 strike, premium would be approximately $1.20 today, or a total of $120 per contract.  If the stock price rose the expected $11 the premium might increase approximately $5.50 to $6.70 per share on your 100-share contract. This is a 458% gain over a short time.

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.


If you want to be a profit predator, this pattern is the key. See how to spot it here

Past potential trade update:

Last week we discussed buying COP calls. On 3-14 the April 19th 120 Call was $3.50. You could have sold on 3-21 for $5.40, a 54% profit.