Options Review | One Stock You Should Watch - Investing Shortcuts

Options Review | One Stock You Should Watch

Transcript – Options Review

Hey everyone, and welcome. This is your options review, brought to you by me, Jeremy Alexander Newsome, part of the Investing Shortcuts team of contributors. I trust you’re doing marvelously majestic. Let’s look at an options set up together. And this one is on UPS, United Parcel Service.

What I want to do first and foremost is look at the trend. That’s the thing I do the first time I am setting up any trade. I ask, “what’s the general trend?”  And if we zoom out, obviously, we see the general trend on UPS is bullish. What I like about it (Referring to chart shown of video), is it also made a nice little higher low right here . So here’s a low, here’s a higher low, really good morning star pattern, building it to there. So that’s nice.

Really nice daily little move. Good, solid run up. Nice bullish candle on earnings. And what I want to do at this point is look for a pullback. So you have five white bullish candles in a row. The trend looks nice, and at the present moment, the bid ask spread on the October $120 call is, I think, $3.95 and $4.05. That’s the bid and the ask. I’m looking for a pullback, something like this, into the moving averages, into that old support resistance. Kind of similar to what happened right here. There’s a little bit of a pullback into those averages. So your limit buy could be $3.80, it could be $3.70, $3.65. Somewhere around there. I’ll kind of let you judge at what price you really want to buy that particular option.

But, the stock could really go below this particular pivot. And the reason I’m going out to October is because this is a blue chip stock. So it likely will take a little bit longer to really fill this gap. I do think that’s the overall intention, though. Is for UPS to slowly, kind of again, pull back, pop, retest a little bit, pop, retest a little bit, pop. And as earnings are in late October, hoping, and kind of crossing my fingers that implied volatility picks up a little bit. The trend starts really rocking and rolling, and that’s pretty much my plan on UPS.

So I like the pullback idea. I like that it’s in a slowly continue higher. And if this one doesn’t work, which is fine, I will try it again. If we get stopped out with a pullback into this enormous double bottom. So if doesn’t really start running here nicely, and it pulls back really hard into here, might do like a January call option. Probably again, $115 or $120. I always like to have a plan B. Like what’s the worst case scenario, just in case. It’s always smart to be thinking in advance. Anyway, that’s my analysis, I hope it was helpful. I will be back for more in the not too distant future.

You all rock, and until next time, love life, live life, and trade it. Bye.

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Jerremy Newsome

Author Jerremy Newsome

Jerremy Alexander Newsome is a full-time trader and the CEO and co-founder of Real Life Trading - a community of innovative, inspiring, and driven people from all around the world. Jerremy and company share their Real Life perspective on everything day trading, retirement planning, investing, budgeting and more... His passion is in trading the market and helping others achieve success with their own trading through enthusiasm and humor. He specializes in candlesticks, gaps, credit spreads, day trading, and swing trading. You can count on his eccentric approach to both trading and teaching to set him apart from your standard educators. We are sure that his quirks and quotes will delight you and of course, help you trade faster, better, and more profitably.

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