Subject: Visa (V) Dips – Is it Time to Get In?

 

Terrys Tips newsletter
     

Dear Friend,

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry 

 
Option Tip of the Week

Visa (V) Dips – Is it Time to Get In?

One analyst recently wrote an article titled Load Up On Visa which is the type of thing usually said when there is a sharp fall in the stock discussed, in the context that it is being offered at a discount. This is certainly not the case with Visa as the correction a few weeks back was much more shallow when compared to other stocks in the sector. The headline goes to show just how positive sentiment is. Also take a look at the following article which discusses Visa’s performance compared to its sector - Is Visa (V) Stock Outpacing Its Business Services Peers This Year?

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Technicals

From a technical perspective, the stock dipped lower in the early month but caught a strong bid near support to erase losses. There is a horizontal level in play at $172 which seems to have been respected by the market. If offered resistance in early June, and support after a gap up later in the month. Earlier this month, the same level held the stock at the open when it gapped lower. The 50-day moving average is also in play, and it is starting to look like the stock has regained it. The overall trend in Visa is impressive and pull backs throughout the rally this year have been shallow. Another sign of strength is how stable the stock was in the past week while the markets were generally volatile and under pressure.

 V Chart August 2019

*source Tradingview.com

If you agree there's further upside ahead for V, consider this trade which is a bet that the stock will continue to advance over the next five weeks, at least a little bit.

Buy To Open V 20SEP19 175 Puts (V190920P175)

Sell To Open V 20SEP19 180 Puts (V190920P180) for a credit of $2.06 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when V was trading near $178.  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 $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $203.50 and your broker would charge a $500 maintenance fee, making your investment $296.50 ($500 – $203.50).  If V closes at any price above $180 on September 20, both options would expire worthless, and your return on the spread would be 69% (787% annualized).

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Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates August 15, 2019

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 - thinkorswimIf 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
 

 

    
Become a Terry’s Tips Premium Insider, and receive all our educational reports and materials
 
ABSOLUTELY FREE
 
by opening a new account at the
best options broker around

thinkorswim. 

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. We will then sign you up 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.

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Testimonial of the Week

With my composite portfolio being up some 60+ % (even AFTER the correction we had in Feb) in just 16 months, I may be your single biggest fan. Keep up the good work.

~ Michael

     

Thank you again for being a part of the Terry's Tips newsletter. If you are interested in signing up as an Insider, visit Terry's Tips today for details.

Sincerely,
Dr. Terry Allen
Terry's Tips

 
 
Week 551

August 19, 2019
 
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