Salesforce.com (CRM) Shows Renewed Upward 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.
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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.
*source Tradingview.com
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).
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Investing in 5G is old news. I discovered a company with a revolutionary new technology that could be the next Cisco. I expect their $5 stock to climb to $90 and eventually as high as $1,200 per share. A $1,000 investment could grow to as much as $240,000.
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Changes to Investor’s Business Daily (IBD) Top 50 This Week:
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
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Any questions? I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts. seth@terrystips.com
You can see every trade made in the actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here. Why wait any longer to make this important investment in yourself?
Even better, you can become a Terry’s Tips Insider, and receive all our educational reports and materials absolutely free by opening a new account at the best options broker around - thinkorswim. If you open an account with our link, they will give you 60 days of free trading or up to $600, the same deals they give to everyone who opens an account with them. You must use this link to sign up - open thinkorswim account – and once you have funded your account with at least $3500, email Seth@TerrysTips.com and let him know that you have done it, and this is what he will do – sign you for our Premium Service package ($119.95 value plus an extra 4 months of our Premium Service, valued at another $190.80). You get $300.65 worth of services without paying us one penny.
I look forward to having you on board, and to prospering with you.
Terry
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