Tuesday, June 8th, 2021
Plant-Based Meat Company Heads Higher
Dear Fellow Trader,
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 spend 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 market was closed for Memorial Day on Monday. It was up every day except Thursday. Several days there were swings back and forth, but most of the days closed up recouping from the bearish swings.
For the updates on previously discussed symbols, please scroll down.
For today’s Trade of the Day, we will be looking at Beyond Meat, Inc., symbol (BYND).
Before analyzing BYND’s chart, let’s take a closer look at the company and its services.
Beyond Meat, Inc., a food company, manufactures, markets, and sells plant-based meat products in the United States and internationally. The company sells its products through grocery, mass merchandiser, club, convenience store, natural retailer channels, restaurants, foodservice outlets, and schools, as well as through an e-commerce site.
The company was formerly known as Savage River, Inc. and changed its name to Beyond Meat, Inc. in September 2018. Beyond Meat, Inc. was founded in 2009 and is headquartered in El Segundo, California.
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 drops below that line, it would be time to close. Watch for a continued rise toward its target.
A cross above or a bounce off the CCI zero line is bullish, in that it is suggesting price has gone from bearish to bullish. A rise from the zero line up toward 100, suggests even more strength. 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.
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.
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
BYND has turned bullish as it rises further above the zero line and toward 100. This week’s candle is apt to continue its upward movement that could take it higher. We are looking for a continued rise toward 150 and then above 160, its price target.
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 BYND
BYND’s price pulled back from February through mid-May and it is starting an upward move the last two weeks. I am writing this on Sunday, if price rises when you receive this on Tuesday, you could consider a call option trade, if the CCI indicator remains above the zero confirmation and heading up.
Price is currently at approximately $146 as I write over the weekend and is expected to continue heading up to, perhaps, $160 and then, 180 and higher.
As long as the CCI line remains above the zero line and then, continues it move up toward the 100 line and then above, price will continue its current uptrend and should remain intact and continue to rise. We will keep an eye on BYND over the course of the next few weeks.
The short-term price target for BYND is $160 and, perhaps, $180, then higher.
To buy shares of Beyond Meat (BYND) stock today would cost approximately $146 per share.
I am suggesting that the price of BYND may rise to $160.
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 5 shares of BYND at $146 or $730 and it increased in price to $160, it would gain $14 or $70 for the 70 shares or 9.5% profit. Not bad.
If you bought one call option contract covering 100 shares of BYND’s stock with a July 16th expiration date for the 160 strike, the premium would be approximately 7.60 per share or a total of $760 for the contract of 100 shares. If price increased the expected $14 over the next few weeks to $160 target, the premium would increase approximately $14 to $21.60. This is a gain of $1,400 on your $760 investment or 184%. That would be a terrific trade!
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.
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 discussed:
Nine weeks ago, we examined Electronic Arts (EA). It pulled back a little from its weekly high to 145.21, but above for the week. It has until June to climb to its 150 strike.
Eight weeks ago, we looked at Pfizer (PFE). It closed down last week to 39.15. Two weeks before it moved up to 40.59 with a target of 39. Already its premium is more than doubled. The premium when it was listed was .39, on Sunday two weeks ago week it was 1.38. Super trade.
Seven weeks ago, we looked at Tesla (TSLA). It seems as if its chart is back testing the zero line of CCI. I mentioned that it would remain viable as long as the CCI stays above zero. Two weeks ago, it failed by crossing below the zero line. Last week it started another upward move.
Six weeks ago, we checked out CRM. Last week it rose to 237.48 and has a 240 strike and a June 18th expiration.
Five weeks ago, we zeroed in on Bausch Health (BHC). It moved down last week to closed at 31.33. It has until June 18th to reach 35 strike.
Four weeks ago, we checked out JP Morgan (JPM). It rose to a high of 167.44 and pulled back to 166.44. It has a 170 strike and a June 18th expiration date.
Three weeks ago, we looked at Regeneron (REGN). Last week it rose to 511.89. It still looks okay, but it needs to push to rich it strike. It has until June to reach the 560 strike
Two weeks ago, we viewed Boeing, (BA) and it rose as high as 258.40. It had a 250 strike and July 16th expiration. Its 6.80 premium doubled and is currently at 10.90 at week’s end but was much higher mid-week.
Last week, we studied American Airline (AAL). It had a 28 strike and until July 16th expiration. Premium was .53 and price rose to 24.30. Price went as high as 26.04 and premium came close to a double.