Here is what I am looking at today. Electronic Arts Inc. (EA) is starting a trend UP and has the potential for a great trade. I have also included an update on a previous trade example at the bottom of this message.
We looked at EA last week. It looks good again this week. EA as an example of how options work and the advantages they offer. In this case we are going to focus on True Strength Index (TSI), a powerful indicator that generates signals that help you spot great trades. You can get a great explanation of TSI here and learn more about how to use it effectively.
You can see on the chart above that the TSI Indicator is at the 0 line and heading UP, telling us it has BULLISH momentum. Whenever we are preparing to enter a trade, we look for confirmation that the move is solid and the likelihood of it continuing in the intended direction is high.
In this case, a move to $137 is the confirmation we are looking for. If that happens, we will look at a target of $147 and even HIGHER.
Options are very effective trading tools as they offer leverage. As an example, if you bought one CALL option contract covering 100 shares of EA’s stock with a July 19th expiration date for the 135 strike, the premium would be approximately $4.70 per share, or a total of $470 for the contract of 100 shares. If price ROSE the expected $10 over the next few weeks, the premium would likely increase approximately $500 to $970. This is a gain of 52% profit. That would be a nice trade over a short period of time!
Being thankful is one of the strongest and most transforming states of being. It shifts your perspective from lack to abundance and allows you to focus on the good in your life, which in turn pulls more blessings into your reality.
I send you wishes for the very best,
Wendy
Last week we discussed buying EA calls. On 6-5 the July 19th 135 Call was $4.70. You could have sold on 6-6 for $6.20, a 32% profit.
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