New Trade Alert: WMT BUY Signal Identified

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My next PowerTrend recommendation is below. But I want to make sure that you’re getting the most out of your subscription too!

By now, you should have received the first three trades. Before you enter into any trades I’ve previously recommended, make sure the options are still trading within the limits at which I recommended them.

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Take your time perusing those materials. Keep in mind, you’ll be able to access them at any point on our website.

But for now…

Let’s get to our next trade alert.

The X-ray system just confirmed a PowerTrend “buy” signal on Walmart, Inc. (NYSE: WMT)

Let’s take a look under the surface of the stock by reviewing the three signals or steps the system looks for…

Step 1: Verify Crossover

Your best and safest chance at profits is to buy when the short-term trend crosses over the long-term trend.

And that’s what we’re seeing in the chart below.

Do you see where the 1-month moving average (red line) crosses above the 10-month simple moving average (purple line) back in August of 2018? That told us the stock was on a bullish trend.

And as you can see, the red line is still above the purple line, meaning that the trend is still in effect today!

Step 2: Confirm Entry Point

The next step is to make sure that we’re entering the trade at the right time. That’s where the Keltner Channels come into play.

Remember, when a stock is trading below the Upper Keltner Channel line, it’s a good time to enter.

And WMT is trading at $120.70 at the time of writing, which is pulling back from the Upper Keltner Channel, and is therefore in the Keltner Channel “buy zone.”

Step 3: Optimize Trade with the 1% Rule

Since the system has confirmed that WMT is in a bullish trend, and that now is a great time to enter a trade… the last step helps to ensure that we choose the best option to profit from the upward momentum.

That’s where the 1% Rule comes in. Essentially, this ensures that the stock price only has to move 1% in order to break even. Anything beyond 1% means we’re profitable!

And at current prices, the WMT December 20, 2019 $110 call option, trading for $11.25, passes the 1% rule test.

You see, if we subtract the $110 strike price from the current stock price of $120.70, we come up with an intrinsic value of $10.70.

Subtracting the intrinsic value of $10.70 from the total premium of $11.25, we come up with a time value of $0.55, which is less than 1% of the current stock price of $120.70.

WMT only needs to increase in value by $0.55 for the option to start profiting!

So that’s the right option to use for this trade.

Now that we have final confirmation using the X-ray system, time to jump into the trade!

Here’s how I want you to execute PowerTrend’s latest trade recommendation…

Buy to open WMT December 20, 2019, $110 call options, which are currently trading for $11.25. If you can’t get in at that price, don’t pay more than $12.00.

Now, if you need help getting started, here’s what you’d do, step by step…

• The symbol is WMT191220C00110000
• Search for options under stock ticker WMT
• Make sure you choose the right month (December 2019)
• Make sure you choose the monthly options (expiring on December 20, 2019)
• Choose the $110 strike price
• Select “call” options
• Select how many contracts to buy. (This part is up to you. Just remember that each contract represents 100 shares.)
• Once you have the correct contract, click “buy to open”

You can also call your broker and say, “I want to buy WMT December 20, 2019, $110 calls for $11.25 per contract. If that price is unavailable, I’ll pay no more than $12.00 per contract.”

Best Regards,

Chuck Hughes
Editor, Power Trend Options

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