Optioneering Newsletter

May 27, 2018

Mini Dow Futures Monthly

We trade with the trend and the long-term trend is up. This month’s trading
suggests that the pullback could be over and the uptrend could be
resuming.

The first profit opportunity we will review this week is in SRPT, or Sarepta
Therapeutics, Inc. Sarepta Therapeuticsis a biopharmaceutical company
focused on the discovery and development of precision genetic medicines to
treat rare neuromuscular diseases. The primary focus is on rapidly advancing
Duchenne muscular dystrophy (DMD) therapies that are designed to treat the
underlying cause of the disease.

SRPT Monthly

The monthly chart shows that the overall trend in SRPT has been up since the
2016 low. It’s been going straight up this year.
 SRPT Daily

The daily chart for SRPT shows a strong bull trend. The pullback from this
month’s high gives us a buying opportunity.

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

Traders who want more leverage can buy SRPT calls. SRPT has options
expiring every week until July 6th. After that, SRPT has options expiring later in
in July, August, November, January 2019, and January 2020.
 Buy to Open SRPT July 6th expiration 75-strike Call
Sell to Open SRPT July 6th expiration 88-strike Call

We can see from the Call Option Spread Analysis Calculator that if the SRPT
stock price declines by -2.5%, stays where it is, or increases in price when the
options expire, the spread will make a 51.2%, or $440 profit. If SRPT is down
-5% when the options expire, the profit will be 40.3% or $347. If SRPT is down
-7.5% when the options expire, the spread will make a 13.7% or $118 profit.

The next profit opportunity we will review this week is in ATHM, or

Autohome, Inc. Autohome is the leading online destination for automobile
consumers in China.
 ATHM Monthly

The monthly chart shows that ATHM hit a new record high this month. New
record highs are bullish.
 ATHM Daily

The daily chart shows that the overall trend in ATHM has been up since
the chart started last year. The pullback to the Mid-Line of the Keltner
Channel gives us a buying opportunity.

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

Traders who want a more leveraged approach could consider buying ATHM
calls. ATHM has options expiring in June, July, September, and December.
 Buy to Open ATHM July 20th expiration 85-strike Call
Sell to Open ATHM July 20th expiration 95-strike Call

We can see from the Call Option Spread Analysis Calculator that if the
ATHM stock price declines by -5%, stays the same as it is now, or
increases in price at expiration, the spread will show a profit of 33.3% or
$250. If ATHM is down -7.5% when the options expire, the spread will
make a 5.9% or $44 profit.

The next profit opportunity we will review this week is in LITE, or Lumentum
Holdings, Inc. Lumentum manufactures optical and photonic products.
Lumentum’s optical components and subsystems are part of virtually every
type of telecom, enterprise, and data center network.
 LITE Monthly

The monthly chart shows that the overall trend in LITE has been up since the
chart started in late 2015. LITE hit a new record high in March. There are no
signs of a top.
 LITE Daily

The daily chart shows the March record high. The big gap up early this
month suggests that the pullback is over and the uptrend is resuming.

We are going to review a Call Debit spread for LITE.

Traders who want more leverage can buy LITE calls. LITE has options
expiring every week until July 6th. After that, LITE has options expiring in
mid-July, August, September, December, January 2019, and January
2020.
 Buy to Open LITE July 20th expiration 50-strike Call
Sell to Open LITE July 20th expiration 60-strike Call

We can see from the Call Option Spread Analysis Calculator that if the LITE
stock price declines by -5%, stays where it is, or increases in price when the
options expire, the spread will make a 25% or $200 profit. If LITE is down
-7.5% when the options expire, the spread will make 7.5% or $60.

The last 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

The monthly chart shows that SPLK has been going almost straight up since
last summer. There are no signs of a top.
 SPLK Daily

The daily chart for SPLK shows a very strong bull trend. Friday’s close below
the Mid-Line of the Keltner Channel gives us a buying opportunity.

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 July 6th. After that, SPLK
has options expiring in mid-July, August, November, January 2019, and
January 2020.
 Buy to Open SPLK July 20th expiration 95-strike Call
Sell to Open SPLK July 20h expiration 105-strike Call

We can see from the Call Option Spread Analysis Calculator that if the SPLK
stock price declines by -2.5%, stays where it is, or increases in price when
the options expire, the spread will show a profit of 26.6% or $210. If SPLK is
down -5% when the options expire, the profit will be 23.4% or $185. If SPLK
is down -7.5% when the options expire, the spread will lose -11.5% or -$91.

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