Dell Technologies Making New Highs

October 13th, 2020 Dell Technologies Making New Highs Dear Reader, Yesterday, we looked at a Monthly Price Chart for Twilio Inc., noting that the stock's 1-Month Price is trading above the 10-Month SMA. For today's Trade of the Day we will be looking at a Daily Price chart for Dell Technologies, Inc. stock symbol: DELL. Before breaking down DELL's daily price chart let's first review which products and services are offered by the company. Dell Technologies Inc. designs, develops, manufactures, markets, sells, and support IT hardware, software, and services solutions worldwide. It operates through three segments: Infrastructure Solutions Group (ISG), Client Solutions Group (CSG), and VMware. The company also provides information security and cybersecurity solutions; cloud software and infrastructure-as-a-service solutions that enable customers to migrate, run, and manage mission-critical applications in cloud-based IT environments; cloud-based integration services; and financial services. Now, let's begin to break down the Daily Price chart for DELL. Below is a Daily Price Chart with the price line displayed by an OHLC bar.

The Daily Price chart above shows that DELL stock began reaching a series of higher highs and higher lows since late March. This pattern of bullish trading suggests the stock will march on to a further advance. You see, after a stock makes a series of two or more higher highs and higher lows, the stock typically continues its price up trend and is a good candidate for a call option purchase. Our price target for DELL stock is 75.65 per share. 98.8% Profit Potential for DELL Option Now, since DELL stock is currently making a series of higher highs and higher lows the stock's bullish rally will likely continue. Let's use the Hughes Optioneering calculator to look at the potential returns for a DELL call option purchase. The Call Option Calculator will calculate the profit/loss potential for a call option trade based on the price change of the underlying stock/ETF at option expiration in this example from a flat DELL price to a 12.5% increase. The Optioneering Team uses the 1% Rule to select an option strike price with a higher percentage of winning trades. In the following DELL option example, we used the 1% Rule to select the DELL option strike price but out of fairness to our paid option service subscribers we don't list the strike price used in the profit/loss calculation.

Trade with Higher Accuracy When you use the 1% Rule to select a DELL in-the-money option strike price, DELL stock only has to increase 1% for the option to breakeven and start profiting! Remember, if you purchase an at-the-money or out-of-the-money call option and the underlying stock closes flat at option expiration it will result in a 100% loss for your option trade! In this example, if DELL stock is flat at 69.25 at option expiration, it will only result in a 1.9% loss for the DELL option compared to a 100% loss for an at-the-money or out-of-the-money call option. Using the 1% Rule to select an option strike price will result in a higher percentage of winning trades compared to at-the-money or out-of-the-money call options. This higher accuracy can give you the discipline needed to become a successful option trader and can help avoid 100% losses when trading options. The goal of this example is to demonstrate the powerful profit potential available from trading options compared to stocks. The prices and returns represented below were calculated based on the current stock and option pricing for DELL on 10/12/2020 before commissions. When you purchase a call option, there is no limit on the profit potential of the call if the underlying stock continues to move up in price. For this specific call option, the calculator analysis below reveals if DELL stock increases 5.0% at option expiration to 72.71 (circled), the call option would make 48.4% before commission. If DELL stock increases 10.0% at option expiration to 76.18 (circled), the call option would make 98.8% before commission and outperform the stock return nearly 10 to 1. And if DELL stock increases to our initial price target of 75.65 at option expiration the call option would make 91.1% before commission. The leverage provided by call options allows you to maximize potential returns on bullish stocks. The Hughes Optioneering Team is here to help you identify winning trades just like this one.

Interested in accessing the Optioneering Calculators? Join one of Chuck's Trading Services for unlimited access! The Optioneering Team has option calculators for six different option strategies that allow you to calculate the profit potential for an option trade before you take the trade. Average Portfolio Return of 326.1% Below is a screenshot of the current open trade profit results from Chuck's Inner Circle Trading Service. There are currently $638,947.67 in open trade profits with an average portfolio return of 326.1% demonstrating the ability of the Optioneering Strategy to deliver substantial returns with no losing portfolios.

Chuck's Elite Inner Circle Today Chuck is offering you a very special deal. As a Trade of the Day subscriber, if you sign up and become a member of The Chuck Hughes Inner Circle Trading Service today, he will give you special discount. Just call Brad at 1-866-661-5664 or 1-310-647-5664 to join and use the code "Optioneering VIP" to receive special pricing! Wishing You the Best in Investing Success,

Chuck Hughes Editor, Trade of The Day Have any questions? Email us at dailytrade@chuckstod.com

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