Tuesday, August 17th, 2021
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 spending 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 Dow was up 4 days out of 5 and hit an all-time high again this week.
For the updates on previously discussed symbols, please scroll down. (be sure to check out this symbol that gave a potential 351% move)
For today’s Trade of the Day, we will be looking at American Citigroup, Inc. symbol (C)
Before analyzing C’s chart, let’s take a closer look at the company and its services.
Citigroup Inc., a diversified financial services holding company, provides various financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa. The company operates traditional banking services to retail customers through retail banking, Citi-branded cards, and Citi retail services. It also provides various banking, credit card, lending, and investment services through a network of local branches, offices, and electronic delivery systems, as well as wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative, equity and fixed income research, corporate lending, investment banking and advisory, private banking, cash management, trade finance, and securities services to corporate, institutional, public sector, and high-net-worth clients.
As of December 31, 2020, it operated 2,303 branches primarily in the United States, Mexico, and Asia. Citigroup Inc. was founded in 1812 and is headquartered in New York, New York.
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 stays above that line, the upward trend should continue. Watch for a continued rise toward its target.
A cross down through the CCI zero or -100 line is bearish, in that it is suggesting price has gone from bearish to even more bearish. A cross up through the zero line and a cross through 100, suggests price is bullish. 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. A rise toward 100 is a continuation of that bullishness. Up through the 100 line creates a green fin of bullishness, until it drops back down through the 100-line.
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 and a drop below -100 suggests even more bearishness.
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
C is bullish as it rises further above the zero line. This week’s candle is apt to continue its upward movement that could take it higher. We are looking for a continued rise toward a price of $76 and then higher.
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 C
C’s price continues to move up. I am writing this on Sunday, if price continues to rise above 73 when you receive this on Tuesday, you could consider a call option trade. We are expecting the CCI indicator to continue rising above the zero line and head up further.
Price is currently at approximately $73 as I write over the weekend and is expected to continue heading up to, perhaps, $76 and then higher.
If the CCI line stays above to the zero line and then, continues up, price will continue its current uptrend and continue to rise. We will keep an eye on it over the course of the next few weeks.
The short-term price target for C is $76 and, perhaps, higher.
To buy shares of Citigroup (C) stock today would cost approximately $73 per share
I am suggesting that the price of C may rise to $76.
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 10 shares of C at $73 and it increased in price to $76, it would result in a profit of $3 or $30 for 10 shares or a 4% gain.
If you bought one Call option contract covering 100 shares of C’s stock with a September 3rd (Sept wk 1) expiration date for the 76 strike, the premium would be approximately .65 per share or a total of $65 for the contract of 100 shares. If price increased the expected $3 over the next few weeks to $76 target, the premium would increase approximately $1.50 to $2.15. This is a gain of $150 on your $65 investment or 230% profit. That would be a terrific trade!
It is exciting to make money if price rises or falls.
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 discuss:
Three weeks ago, we studied CRM Aug 20 expiration and a 260 strike. With the drop two weeks ago, the trade was questionable. Last week it rose to 254. It still has a way to go to be profitable and time is short. (click here for the article)
Two weeks ago, we looked at QCOM’s Aug 20 expiration and a 155 strike with a 1.58 premium. It went as high as 149 last week, but that was enough to bring the premium up when time decay escalates. It needs a big move. (click here for the article)
Last week, we examined AIG with an expiration date of Aug 27th (Aug wk 4) and a strike price of 54 and premium of .39. Price rose and the premium was higher during the day on Friday and closed at 1.29 or a gain of .90 or 351% profit. Awesome trade. (click here for the article)
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