Optioneering Newsletter

February 10, 2019

Mini Dow Futures Monthly

The Mini Dow is above the monthly moving average line. When it’s
above the moving average line, the trend is up. The next upside target
is last year’s high. The next target beyond that is last year’s high of 26,
981. A beak through there could result in a further advance. Key support
is seen at 23,268. Right now, the trend is up and the bulls have the
momentum, so we will review four call debit spreads this week.

The first profit opportunity we will review is in GBT, or Global Blood

Technologies, Inc. GBT develops oral medicines for the treatment of chronic
blood-based diseases and severe genetic disorders.
 GBT Monthly

The monthly chart shows that if GBT was bullish from the late 2016 low
until the early 2018 high. After that, it experienced a significant decline.
Now the monthly chart has a potential higher low bottom setup. Since
higher low bottoms point to higher high tops, the next upside target is
above last year’s high, with key support at last year’s low.
 GBT Daily

The daily chart shows that GBT has been in an overall bull trend since 2017.
As you can see, GBT is on the verge of breaking through a trading range
that lasted most of last year. A trading range breakout can result in a
significant advance. The next upside target would be last year’s high.

We are going to review a Call Debit Spread for GBT.

Traders who want more leverage can buy GBT calls. GBT has options
expiring in February, March, April, June, September, January 2020, and
January 2021.
 Buy to Open GBT April 18th 40-strike Call
Sell to Open GBT April 18th 50-strike Call

We can see from the Call Option Spread Analysis Calculator that if the GBT
stock price stays where it is or increases in price when the options expire, the
profit will be 52.7% or $345. If GBT is down -2.5% when the options expire, the
profit will be 38.8% or $254. If GBT is up 5% when the options expire, the profit
will be 19.6% or $128. If GBT is down -7.5% at option expiration, there will be a
tiny 0.4% or $2 profit.

The next profit opportunity we will review is in ALRM, or Alarm.com Holdings,

Inc. ALRM offers interactive security solutions for home and business owners.
The ALRM products include security systems which include image sensor,
crash and smash protection, web control, mobile access and video monitoring.
 ALRM Monthly

The monthly chart shows that ALRM has been in a steady uptrend since it
started trading in 2015. ALRM just hit a new record high last week. New record
highs are bullish.
 ALRM Daily

A daily chart clearly shows that ALRM has been in an uptrend, however, the
perspective is a bit different. It doesn’t look as steady as the monthly chart.
The pauses look longer and the dips seem deeper, at least to me. To me,
the difference seems to be that there are about 20 daily bars on a daily chart
for every one bar on a monthly chart.

We are going to review a Call Debit Spread for ALRM.

Traders who want to employ a more leveraged approach can buy ALRM
calls. ALRM has options expiring in February, March, June, and September.
 Buy to Open ALRM March 15th expiration 52.50-strike Call
Sell to Open ALRM March 15th expiration 62.50-strike Call

We can see from the Call Option Spread Analysis Calculator that if the ALRM
stock price declines by -2.5%, stays where it is, or increases in price when the
options expire, the profit will be 41.8% or $295. If ALRM is down -5% when the
options expire, the profit will be 28.9% or $204. If ALRM is down -7.5% when
the options expire, the spread will make a 5.9% or $42 profit.

The next profit opportunity we will review this week is in SPLK, or Splunk, Inc.
Splunk was founded to pursue a disruptive new vision: make machine data
accessible, usable and valuable to everyone. Machine data is one of the fastest
growing and most valuable parts of big data -- generated by every component of
IT infrastructures, applications, mobile devices, website clickstreams, social
data, sensors and more.
 SPLK Monthly

SPLK just hit a new record high last week. New record highs are bullish.
 SPLK DAILY

The daily chart shows that SPLK just broke through last year’s high. Now
that it hit a new all-time high, it’s in uncharted territory. When a stock hits a
new all-time high and is in previously uncharted territory, you never know
how far it can go.

We are going to review a Call Debit Spread for SPLK.

Traders who want to employ a more leveraged

approach can buy SPLK calls. SPLK has options expiring every week until
March 29th. After that, SPLK has options expiring in May, June, August,
January 2020, and January 2021.
 Buy to Open SPLK March 22nd expiration 112-strike Call
Sell to Open SPLK March 22nd expiration 124-strike Call

We can see from the Call Option Spread Analysis Calculator if the SPLK
stock price is down 5%, stays where it is, or increases in price when the
options expire, the trade will make a 38.7% or $335 profit. If SPLK is down
-7.5% when the options expire, the profit will be 4.9% or $42.

The last profit opportunity we will review this week is in TCMD, or Tactile
Systems Technology, Inc. TCMD is a medical technology company that
develops medical devices for the treatment of chronic diseases at home. The
TCMD product pipeline consists of Flexitouch System, the Entr' System and
the ACTitouch System
.
 TCMD Monthly

The monthly chart shows that TCMD was in a strong bull trend from the time
it started trading until last year’s high. Now, after experiencing a deep
decline, TCMD is on the verge of hitting a new all-time high.
 TCMD DAILY

The daily chart shows that the trend is up and the bulls are in control. It’s
hard to see on this chart, but TCMD had a big gap up and very, very bullish
day on January 8th. As we’ve said before, there’s an old market adage that
says trade in the direction of wide range gaps, especially when they’re in
synch with the trend.

We are going to review a Call Debit Spread for TCMD.

Traders who want to employ a more leveraged

approach can buy TCMD calls. TCMD has options expiring in February,
March, April and July.
 Buy to Open TCMD April 18th expiration 55-strike Call
Sell to Open TCMD April 18th expiration 65-strike Call

We can see from the Call Option Spread Analysis Calculator if the TCMD
stock price is down 5%, stays where it is, or increases in price when the
options expire, the trade will make a 37.9% or $275 profit. If TCMD is down
-7.5% when the options expire, the profit will be 21.3% or $155.

EARNINGS SEASON: There are four “Earnings Seasons” a year. The

seasons begin in January, April, July, and October and they each
last about two months. The earnings reports can have an impact on
the stock price. We don’t know if the impact is going to be positive
or negative (or nothing at all). It’s up to you to decide if you want to
be in a trade when the earnings report is announced. Here’s a link for
a page that can help you keep track of the report dates:

https://www.earningswhispers.com/calendar
 Note: Profit performance displayed in this newsletter does not include transaction
costs.

This newsletter includes some trading ideas following Chuck Hughes’ trading
strategies along with educational information. For a complete listing of Chuck’s
exact trades, including specific entries and exits and real time Portfolio tracking,
please call Brad at 1- 866-661-5664 or 310-647-5664