October 3rd,

2024
Edition

SPX Monthly Chart

August 2024 ended

with the S&P posting
another month close
above the monthly
moving average line
for a continuing Buy
Signal. With the
continued buy signal,
we’ll look at a stock, a
call purchase, and two
debit spreads.

ELVN
The first profit opportunity we will review is in ELVN, or Enliven Therapeutics Inc.
ELVN is a clinical-stage precision oncology company focused on the discovery and
development of small molecule kinase inhibitors.
ELVN Monthly Chart
WT The monthly chart
shows ELVN gave us the
current buy signal when
it closed above the
moving average line in
February 2024. The next
targets for ELVN are 32
and 35.
 ELVN Daily Chart
The daily chart shows that
ELVN has been forming a
pattern of higher highs and
higher lows since the chart
started. The bullish pattern
points to a further advance.
We recommend buying
ELVN stock at the current
price level.

EIX
The next profit opportunity we will review this week is a Call Option purchase in EIX,
or Edison International. EIX is one of the nation's largest electric utility holding
companies.
EIX Monthly Chart

The monthly chart shows

that EIX closed above the
monthly moving average
line and activated the
current buy signal last
December when the stock
price was about 70. The
next targets are 95 and 100.
Last month’s high for EIX is also a new record high. What’s better than a new 52-
week high? A new record high! There are no signs of a peak in the movement.

EIX Daily Chart

As we said above, we want
to buy a call in EIX. We will
first look at selecting a call
option strike price for
purchasing an EIX call. EIX
is currently trading at
86.64. Let’s look at buying
the EIX November 15 80-
Strike Call. The November
15 options expire in 42
days.

The Call Option Purchase calculator will calculate the profit potential for a call option
purchase trade based on the price change in the underlying stock/ETF at option
expiration in this example from a 12.5% change in stock price to a flat stock price.
We developed what we call the 1% Rule to help us select an option strike price. The 1%
rule says to limit the time value portion of the option to less than 1% of the stock/ETF
price. If you limit the time value portion of an option to 1%, the stock price only
has to move 1% for the option contract to break even and start profiting.
The calculator will also calculate the time value portion of an option. With this option
purchase, the time value is 0.55 point (boxed in red). The time value of 0.55 is less
than 1% of the 86.65 price, so this strike price qualifies under the 1% Rule.
s
Buy to Open the EIX Nov 15 80-Strike Call The bottom row lists the
percent return profit
potential. We can see that if
the EIX stock price
increases 1% at option
expiration (boxed in green)
a 4.4% or $32 profit will be
realized. This confirms the
1% Rule of at least breaking
even or profiting with only
a 1% increase in the stock
price.
There is no limit on the Buy to Open the EIX Nov 15 80-Strike Call
profit potential of a Call
Option purchase if the
underlying stock/ETF •
continues to increase in
price. If EIX increases 10%
between now and option
expiration, the Call Option
Purchase Calculator shows
that the 80-strike call will
realize a 112.7% or $812
profit (boxed in green).

On the other hand, if EIX remains flat at option expiration, the 80-Strike Call will only
lose -7.6% or -$55. Remember, if you purchase an at-the-money or out-of-the-money
option and the underlying stock/ETF is flat or down at option expiration, it could
result a 100% loss for your option trade! Using the 1% Rule to select an option strike
price can increase your percentage of winning trades compared to trading at-the-
money or out-of-the- money strikes and this higher accuracy can make you a more
successful trader.
We recommend buying the EIX Nov 15 80-Strike Call at the current price level.

MOD
The next profit opportunity we will review is in MOD, or Modine Manufacturing
Company. MOD operates primarily in a single industry consisting of the manufacture
and sale of heat transfer equipment.
MOD Monthly Chart

The monthly chart shows that MOD

has been above the moving average
line since March 2022. MOD has
rallied from about 10 to 140 since
then.
 MOD Daily Chart
The daily chart shows that
MOD went almost straight up
last month. The little dip back
inside the Keltner Channel
gives us a buying
opportunity.
We are going to review a Call
Debit Spread trade for MOD.
Traders who want a more
leveraged approach can buy
MOD calls.

Buy to Open the MOD Nov 15 105-Strike Call

Sell to Open the MOD Nov 15 115-Strike Call
We can see from
this Call Option
Spread Analysis
that if the MOD
stock price
declines by -5%,
remains flat, or
increases in price
when the options
expire, the spread
will make 47.1% or
$320. If MOD is
down -7.5% at
expiration, the
trade will still
make 47.1% or
$320.

VIST
The last profit opportunity we will review is in VIST, or Vista Oil & Gas, S.A.B. de C.V.
VIST is engaged in the energy sector. It focuses on the identification, acquisition and
development of oil and gas fields primarily in Mexico, Argentina, Brazil and Colombia.
Vista Oil & Gas, S.A.B. de C.V. is based in Mexico.
 VIST Monthly Chart

The current VIST buy signal was

triggered all the way back in
April 2021 when the stock price
was 2.66. Two months ago, the
stock price hit 52.47. The next
targets are 60 and 65. Last
month’s wide range bullish
reversal points to a further
advance.

VIST Daily Chart

The daily chart shows that VIST

recently rallied to the highest
point on the chart. This
month’s dip gives us a buying
opportunity.
We are going to review a Call
Debit Spread trade for VIST.
Traders who want a more
leveraged approach can buy
VIST calls.

Buy to Open the VIST Dec 20 40-Strike Call

Sell to Open the VIST Dec 20 45-Strike Call

We can see from this Call

Option Spread Analysis that if
the VIST stock price declines
by -7.5%, remains flat, or
increases in price when the
options expire, when the
options expire, the spread will
make a 33.3% or $125 profit.
That’s the same profit with a
7.5% swing in either direction.
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This week we recommended the following:

Buy ELVN Stock
Buy to Open the EIX Nov 15 80-Strike Call
Buy to Open the MOD Nov 15 105-Strike Call
Sell to Open the MOD Nov 15 115-Strike Call
Buy to Open the VIST Dec 20 40-Strike Call
Sell to Open the VIST Dec 20 45-Strike Call

Note: Profit performance displayed in this newsletter does not include commission
cost. Prices are based on Thursday End of Day unless the market is closed.

We’ll see you next

week!