Here is what I am looking at today. Exxon Mobil Corp. (XOM) 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.

Let’s take a look at XOM 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.

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You can see on the chart above that the TSI Indicator is through the 0 line, telling us it has bearish 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 $96 is the confirmation we are looking for. If that happens, we will look at a target of $90 and even lower.

Options are very effective trading tools as they offer leverage. As an example, if you bought one Put option contract covering 100 shares of XOM’s stock with a Feb 16th expiration date for the 95 strike, the premium would be approximately $3.65 per share, or a total of $365 for the contract of 100 shares.  If price fell the expected $6.00 over the next few weeks, the premium would likely increase approximately $4.00 to $765 This is a gain of 110% 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

Click here to see how to add a $23500 weekly paycheck to your income.

Last week we discussed buying DOCU calls. On 1-16 the Feb 16th 65 call was $2.40. You could have sold on 1-19 for $2.85, a 19% profit.