ServiceNow Shares Trending Up

October 15th, 2020 ServiceNow Shares Trending Up Dear Reader, Yesterday, we looked at a Daily Price chart of Digital Turbine, Inc. noting the stock's 50-Day EMA is above the 100-Day EMA. For today's Trade of the Day we will be looking at a Daily Price chart for ServiceNow, Inc. stock symbol: NOW. Before breaking down NOW's daily price chart let's first review which products and services are offered by the company. ServiceNow, Inc. provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide. The company offers information technology (IT) service management applications; and digital workflow products for customer service, human resources, security operations, integrated risk management, and other enterprise departments. Now, let's begin to break down the Daily Price chart for NOW. Below is a Daily Price Chart with the price line displayed by an OHLC bar.

Buy NOW Stock The Daily Price chart above shows that NOW stock has been hitting new 52-Week Highs regularly since early May. Simply put, a stock does not just continually hit a series of new 52-Week Highs unless it is in a very strong bullish trend. The Hughes Optioneering team looks for stocks that are making a series of 52-Week Highs as this is a good indicator that the stock is in a powerful uptrend. You see, after a stock makes a series of two or more 52-Week Highs, the stock typically continues its price uptrend and should be purchased. Our initial price target for NOW stock is 568.45 per share. Profit if NOW is Up, Down or Flat Since NOW has been making a series of 52-Week Highs, the most likely future price movement for NOW stock is up, making NOW a good candidate for a call option debit spread. The Call Option Spread Calculator will calculate the profit/loss potential for a call option spread based on the price change of the underlying stock/ETF at option expiration in this example from a 7.5% increase to a 7.5% decrease in NOW stock at option expiration. The goal of this example is to demonstrate the 'built in' profit potential for option spreads and the ability of spreads to profit if the underlying stock is up, down or flat at option expiration. Out of fairness to our paid option service subscribers we don't list the option strike prices used in the profit/loss calculation. The prices and returns represented below were calculated based on the current stock and option pricing for NOW on 10/14/2020 before commissions.

Built in Profit Potential For this option spread, the calculator analysis below reveals the cost of the spread is $625 (circled). The maximum risk for an option spread is the cost of the spread. The analysis reveals that if NOW is flat or up at all at expiration the spread will realize a 60.0% return (circled). And if NOW decreases 7.5% at option expiration, the option spread would make a 60.0% return (circled). Due to option pricing characteristics, this option spread has a 'built in' 60.0% profit potential when the trade was initiated. Option spread trades can result in a higher percentage of winning trades compared to a directional option trade if you can profit when the underlying stock/ETF is up, down or flat. A higher percentage of winning trades can give you the discipline needed to become a successful trader. 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. Trade High Priced Stocks for $350 With Less Risk One of the big advantages to trading option spreads is that spreads allow you to trade high price stocks like Amazon, Google, or Netflix for as little as $350. With an option spread you can control 100 shares of Google for $350. If you were to purchase 100 shares of Google at current prices it would cost about $156,000. With the stock purchase you are risking $156,000 but with a Google option spread that costs $350 your maximum risk is $350 so your dollar risk is lower with option spreads compared to stock purchases. Chuck's Elite Inner Circle Chuck wants to offer you a special opportunty. 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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