from the desk of Dr. Terry F Allen

Skip navigation

Member Login  |  Contact Us  |  Sign Up

802-877-8330

Archive for the ‘SPY’ Category

Salesforce.com (CRM) Shows Renewed Upward Momentum

Monday, January 6th, 2020

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Salesforce.com is an outperformer and its stock is poised for an upside breakout. Take a look at the following two articles for details – Has salesforce.com (CRM) Outpaced Other Computer and Technology Stocks This Year? and Salesforce.com Is Ready for an Upside Breakout.

Technicals

CRM has broken higher from a large bullish flag pattern that was six months in the making. The stock broke higher in November, and in the past week, it posted a series of higher highs and higher lows above the flag pattern to confirm the trend reversal. The stock is holding within a bullish trend channel and strong support is found near the lower bound of the channel as the 20-day moving average resides near it to create a confluence.

Salesforce (CRM) Chart January 2020 showing upward momentum

CRM Chart January 2020

If you agree there’s further upside ahead for CRM, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open CRM 07FEB20 162.5 Puts (CRM200207P162.5)
Sell To Open CRM 07FEB20 165 Puts (CRM200207P165) for a credit of $0.92 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when CRM was trading near $166.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $90.70 and your broker would charge a $250 maintenance fee, making your investment $159.30 ($250 – $90.70).  If CRM closes at any price above $165 on February 7, both options would expire worthless, and your return on the spread would be 57% (650% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates January 4, 2020

IBD Underlying Updates January 4, 2020

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Visa (V) – A Steady Performer Poised for Gains

Monday, December 23rd, 2019

 

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Visa (V) – A Steady Performer Poised for Gains

Visa is a popular stock among analysts. So much so that Kiplinger included it in their top 20 stocks to buy for 2020. Morgan Stanley likes the stock as well, check out the following article that discusses a price target upgrade – Morgan Stanley lifts Visa, Mastercard price targets.

Technicals

Visa rallied to a record high in the past week, clearing above a hurdle near $186 that had held it lower in September. The stock trades comfortably above its 20-day moving average which has been offering support ever since the stock climbed above it in the second half of October.

VISA Chart December 2019 options trading idea

V Chart December 2019

If you agree there’s further upside ahead for V, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open V 24JAN20 185 Puts (V200124P185)
Sell To Open V 24JAN20 187.5 Puts (V200124P187.5) for a credit of $0.87 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when V was trading near $188.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $85.70 and your broker would charge a $250 maintenance fee, making your investment $164.30 ($250 – $85.70).  If V closes at any price above $187.5 on January 24, both options would expire worthless, and your return on the spread would be 52% (593% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates December 21, 2019

IBD Underlying Updates December 21, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

PayPal (PYPL) Is Set To Resume Its Bullish Trend

Monday, November 4th, 2019

Recent headlines are suggesting that now might be a good time to get into PYPL, take a look at what these two analysts are saying about the stock – Why I Just Bought PayPal Stock and PayPal’s Momentum Is Spreading Across the World.

Technicals

There are several recent developments that signal PayPal’s stock may have resumed within its broader bullish trend. For starters, the stock has regained its 50-day moving average. This is an indicator that PYPL traded below for much of the correction that started in July. There is a horizontal level near the moving average that is currently creating a nice support confluence. This level falls near $104 and originates from a low posted in late May. Perhaps the strongest signal is that the stock is bouncing from the 50-week moving average, this is an indicator the stock has not traded below on a sustained basis for at least 5 years. Further, a bullish reversal candlestick has printed on both a weekly and monthly chart.

PYPL Chart November 2019 vertical options spread

PYPL Chart November 2019

If you agree there’s further upside ahead for PYPL, consider this trade which is a bet that the stock will continue to advance over the next five weeks, at least a little bit.

Buy To Open PYPL 06DEC19 102 Puts (PYPL191206P102)
Sell To Open PYPL 06DEC19 105 Puts (PYPL191206P105) for a credit of $1.13 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PYPL was trading near $105.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $111.70 and your broker would charge a $300 maintenance fee, making your investment $188.30 ($300 – $111.70).  If PYPL closes at any price above $105 on December 06, both options would expire worthless, and your return on the spread would be 59% (673% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates November 2, 2019 options strategy

IBD Underlying Updates November 2, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Visa (V) Regains Momentum Following Earnings Report

Monday, October 28th, 2019

Visa’s earnings report in the past week has boosted sentiment among analysts. The following two articles include two upward price target revisions and a case for why the stock can continue to strengthen from here – Visa Analysts Encouraged By Q4 Results, 2020 Guidance and Visa stock gains after forecast paints a picture of continued strength in 2020.

The rally that followed the earnings report has lifted Visa’s stock back above all of the commonly looked at moving averages (20, 50 & 100-day). What’s appealing about V is the long-term trend and that dips have been shallow over the year which points to strong demand. There was a correction lower since early September, but the post-earnings upward momentum suggests the stock may have resumed within its broader uptrend.

Visa Chart October 2019 vertical options spread

Visa Chart October 2019

If you agree there’s further upside ahead for V, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open V 29NOV19 175 Puts (V191129P175)
Sell To Open V 29NOV19 177.5 Puts (V191129P177.5) for a credit of $0.99 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when V was trading near $178.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $97.05 and your broker would charge a $250 maintenance fee, making your investment $152.30 ($250 – $97.05).  If V closes at any price above $177.5 on November 29, both options would expire worthless, and your return on the spread would be 63% (730% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 26, 2019

IBD Underlying Updates October 26, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

CDW Corp. (CDW) Is Poised to Break to Fresh Record Highs

Monday, September 9th, 2019

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

CDW Corp. (CDW) Is Poised to Break to Fresh Record Highs

Several Analysts are optimistic about CDW’s outlook, take a look at what there two publications have to say – Is CDW (CDW) Outperforming Other Computer and Technology Stocks This Year? And With EPS Growth And More, CDW (NASDAQ:CDW) Is Interesting.

The most impressive part of CDW is how steadily it has been rising throughout the year. Dips in the stocks price are shallow and appear to be quickly bought up. A rising trend channel has encompassed price action and there are several layers of downside support. The first is a horizontal level that comes in just above $116. Further support comes from the 50-day moving average, currently near $113.50. The moving average is near the bottom of the trend channel and therefore is considering to be major support.

CDW Chart September 2019 verticle options spread

CDW Chart September 2019

If you agree there’s further upside ahead for CDW, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.

Buy To Open CDW 18OCT19 110 Puts (CDW191018P110)
Sell To Open CDW 18OCT19 115 Puts (CDW191018P115) for a credit of $1.18 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when CDW was trading near $118.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $115.50 and your broker would charge a $500 maintenance fee, making your investment $384.50 ($500 – $115.50).  If CDW closes at any price above $115 on October 18, both options would expire worthless, and your return on the spread would be 30% (281% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates September 5, 2019 weekly trade idea

IBD Underlying Updates September 5, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Visa (V) Dips – Is it Time to Get In?

Monday, August 19th, 2019

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Visa (V) Dips – Is it Time to Get In?

One analyst recently wrote an article titled Load Up On Visa which is the type of thing usually said when there is a sharp fall in the stock discussed, in the context that it is being offered at a discount. This is certainly not the case with Visa as the correction a few weeks back was much more shallow when compared to other stocks in the sector. The headline goes to show just how positive sentiment is. Also take a look at the following article which discusses Visa’s performance compared to its sector – Is Visa (V) Stock Outpacing Its Business Services Peers This Year?

From a technical perspective, the stock dipped lower in the early month but caught a strong bid near support to erase losses. There is a horizontal level in play at $172 which seems to have been respected by the market. If offered resistance in early June, and support after a gap up later in the month. Earlier this month, the same level held the stock at the open when it gapped lower. The 50-day moving average is also in play, and it is starting to look like the stock has regained it. The overall trend in Visa is impressive and pull backs throughout the rally this year have been shallow. Another sign of strength is how stable the stock was in the past week while the markets were generally volatile and under pressure.

V Chart August 2019 verticle options spread

V Chart August 2019

If you agree there’s further upside ahead for V, consider this trade which is a bet that the stock will continue to advance over the next five weeks, at least a little bit.

Buy To Open V 20SEP19 175 Puts (V190920P175)
Sell To Open V 20SEP19 180 Puts (V190920P180) for a credit of $2.06 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when V was trading near $178.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $203.50 and your broker would charge a $500 maintenance fee, making your investment $296.50 ($500 – $203.50).  If V closes at any price above $180 on September 20, both options would expire worthless, and your return on the spread would be 69% (787% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates August 15, 2019

IBD Underlying Updates August 15, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

PayPal (PYPL) Dips Following Earnings, What’s Next?

Monday, July 29th, 2019

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

PayPal (PYPL) Dips Following Earnings, What’s Next?

PayPal slipped lower after reporting earnings in the past week. Take a look at what these analysts are saying about the stock post-earnings – PayPal Q2 Earnings Beat Estimates, Revenues Up Y/Y and PayPal’s Earnings May Have Disappointed but Its Chart is “BTF”.

Paypal dipped to the 50-day moving average on Thursday and held above the moving average on Friday. The stock trades at a confluence of support as there is also a horizontal level in play. The level comes in at $113.70 and acted as both resistance and support in the past. In the event the stock falls to hold here, there is further support from the 100-day moving average close to around $112.

PYPL Chart July 2019 vertical options spread after earnings announcement

PYPL Chart July 2019

If you agree there’s further upside ahead for PYPL, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open PYPL 30AUG19 112 Puts (PYPL190830P112)
Sell To Open PYPL 30AUG19 115 Puts (PYPL190830P115) for a credit of $1.45 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PYPL was trading near $115.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $142.50 and your broker would charge a $300 maintenance fee, making your investment $157.50 ($300 – $142.50).  If PYPL closes at any price above $115 on August 30, both options would expire worthless, and your return on the spread would be 90% (1027% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates July 25, 2019 weekly trade ideas

IBD Underlying Updates July 25, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Can The Trade Desk (TTD) Continue the Upward Momentum Into Earnings?

Monday, July 22nd, 2019

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Can The Trade Desk (TTD) Continue the Upward Momentum Into Earnings?

TTD has had a spectacular gain in the first half of the year, check out this article which outlines four reasons why it could continue higher – Is The Trade Desk a Buy?. Also take a look at this article published by Zack’s – The Trade Desk Outpaces Stock Market Gains: What You Should Know.

From a technical perspective, TTD is testing a horizontal level that had acted as resistance in May. Just below it, there is some further support from the 50-day moving average. So far, the decline from the top in early June has not had a lot of momentum behind it. This combined with the hold above the mentioned moving average signals that the broader trend remains firmly to the upside.

TTD Chart July 2019 verticle stock options spread

TTD Chart July 2019

If you agree there’s further upside ahead for TTD, consider this trade which is a bet that the stock will continue to advance over the next three weeks, or at least not decline very much.

Buy To Open TTD 09AUG19 230 Puts (TTD190809P230)
Sell To Open TTD 09AUG19 235 Puts (TTD190809P235) for a credit of $2.48 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when TTD was trading near $235.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $245.50 and your broker would charge a $500 maintenance fee, making your investment $254.50 ($500 – $245.50).  If TTD closes at any price above $235 on August 9, both options would expire worthless, and your return on the spread would be 96% (1947% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates July 18, 2019 Terry's Tips

IBD Underlying Updates July 18, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Ulta Beauty (ULTA) Nears Record Highs, Will it Break Upward?

Monday, July 15th, 2019

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Ulta Beauty (ULTA) Nears Record Highs, Will it Break Upward?

After an impressive run in the first half of the year, several analysts still see the potential for further upside in ULTA. Take a look at what these analysts have to say – Ulta Beauty – Consensus Indicates Potential 4.2% Upside and Why Ulta Beauty Stock Gained 42% So Far in 2019.

ULTA is actually seen approaching a significant resistance level at $359. There are a few indicators that suggest that the stock will break higher from here. First, the stock posted a bullish engulfing candle in the past week. This momentum seems to suggest that ULTA is ready to continue rallying. Second, the stock held above an important support level in May that is found at $315. That level held the stock lower in 2017 and 2018. The strong presence of buyers and the steady bid from the level shows that the stock is well in demand. Lastly, when a stock lingers around a resistance level without a strong show of selling, it usually suggests an upward break. Especially when there is a strong trend in place as is the case for ULTA.

ULTA Chart July 2019 verticle spread

ULTA Chart July 2019

If you agree there’s further upside ahead for ULTA, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open ULTA 16AUG19 350 Puts (ULTA190816P350)
Sell To Open ULTA 16AUG19 355 Puts (ULTA190816P355) for a credit of $2.03 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when ULTA was trading near $356.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $200.50 and your broker would charge a $500 maintenance fee, making your investment $299.50 ($500 – $200.50).  If ULTA closes at any price above $355 on August 16, both options would expire worthless, and your return on the spread would be 67% (764% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates July 11, 2019 Weekly Trade Ideas

IBD Underlying Updates July 11, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

PayPal (PYPL) Dips After Earnings, Is it a Buy?

Sunday, February 3rd, 2019

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

PayPal (PYPL) Dips After Earnings, Is it a Buy?

After briefly piercing to record highs, PayPal stock declined following its earnings report in the past week.  Is the dip a buying opportunity? The following article provides some solid arguments for why it is – Buy the Dip in Paypal Stock Because $100 Is the Next Stop.  Also an article recently published on The Motley Fool makes a compelling argument for growth on the back of rising popularity and potential for PayPal’s app Venmo.  In the article, the company’s CEO was quoted as saying the P2P payment app could potentially surpass PayPal’s payment system in profitability – The Big News in PayPal’s Fourth-Quarter Update.

Aside from chart patterns, a significant appeal to PYPL is that it touched record highs this month, fully erasing the prior decline.  Not only that, it was the first IBD Top 50 listed stock to do so while most have only recovered a part of the fall that took place late in 2018.  In this context, it is certainly an outperformer.  Support is found at $87.55 as a horizontal level there has previously acted as both support and resistance dating back to June last year.  Note that this level was a major barrier in the fourth quarter.  On a weekly chart, the 20-week moving average was the equivalent barrier for Q4.  It currently falls near $85.50 to provide additional support in the event of further near-term downside.  Just above it, the 50-day moving average is found, currently at $86.14.

PYPL Chartl February 2019

PYPL Chartl February 2019

*source Tradingview.com

If you agree there’s further upside ahead for PYPL, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.

Buy To Open PYPL 15MAR19 87.5 Puts (PYPL190315P87.5)
Sell To Open PYPL 15MAR19 90 Puts (PYPL190315P90) for a credit of $0.95 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PYPL was trading near $90.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $92.50 and your broker would charge a $250 maintenance fee, making your investment $157.50 ($250 – $92.50).  If PYPL closes at any price above $90 on March 15, both options would expire worthless, and your return on the spread would be 59% (552% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates February 1, 2019

IBD Underlying Updates February 1, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Making 36%

Making 36% — A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

Order Now

Success Stories

I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

~ John Collins