102.8% Profit Potential for DVA

July 28th, 2020 102.8% Profit Potential for DVA Dear Reader, Yesterday, we looked at Daily Price Chart and an OBV line for ServiceNow, Inc. noting that the stock's OBV line is sloping up. For today's Trade of the Day e-letter we will be looking at a daily price chart for DaVita Inc. stock symbol: DVA. Before breaking down DVA's daily chart let's first review what products and services the company offers. DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure or end stage renal disease (ESRD). The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers. It also provides outpatient, hospital inpatient, and home-based hemodialysis services; owns clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. Now, let's begin to break down the Daily Price chart for DVA stock. Below is a Daily Price chart with the 50-Day EMA and 100-Day EMA for DaVita Inc. 50-Day EMA and 100-Day EMA 'Buy' Signal The 50-Day Exponential Moving Average (EMA) and 100-Day EMA are moving average indicator lines that can provide buy and sell signals when used together. When the shorter-term 50-Day EMA crosses above or below the longer-term 100-Day EMA, this provides either a buy or sell signal depending on which direction the stock price is moving. • 50-Day EMA line Above 100-Day EMA = Price Uptrend = Buy signal • 50 Day EMA line Below 100-Day EMA = Price Downtrend = Sell signal When the 50-Day EMA (blue line) crosses above the 100-Day EMA (red line) this indicates that the stock's buying pressure has begun to outweigh the selling pressure signaling a 'buy' signal. When the 50-Day EMA crosses below the 100-Day EMA this indicates that the selling pressure has begun to outweigh the buying pressure signaling a 'sell' signal. As the chart shows, on July 24th, 2019, the DVA 50-Day EMA, crossed above the 100-Day EMA. This crossover indicated the buying pressure for DVA stock exceeded the selling pressure. For this kind of crossover to occur, a stock has to be in a strong bullish trend. Now, as you can see, the 50-Day EMA is still above the 100-Day EMA meaning the 'buy' signal is still in play. As long as the 50-Day EMA remains above the 100-Day EMA, the stock is more likely to keep trading at new highs in the coming days and weeks. Our initial price target for DVA is 96.45 per share. $1 Is All You Need to Start Your Investing Journey Market master Chuck Hughes spent years learning the secrets to option trading success. And if you ask him, it was worth every second spent. Not only did he make $millions in actual profits, he won 10 Trading Championships! Now, Chuck's ready to share his insider tips and trades. Click here to start your investing journey for $1. 102.8% Profit Potential for DVA Option Now, since DVA's 50-Day EMA is trading above the 100-Day EMA, this means the stock's bullish rally will likely continue. Let's use the Hughes Optioneering calculator to look at the potential returns for a DVA 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 DVA 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 DVA option example, we used the 1% Rule to select the DVA 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 DVA in-the-money option strike price, DVA 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 DVA stock is flat at 88.49 at option expiration, it will only result in a 0.7% loss for the DVA 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 DVA on 7/27/2020 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 DVA stock increases 5.0% at option expiration to 92.91 (circled), the call option would make 51.0% before commission. If DVA stock increases 10.0% at option expiration to 97.34 (circled), the call option would make 102.8% before commission and outperform the stock return 10 to 1. And if DVA stock increases to our initial price target of 96.45 at option expiration the call option would make 92.4% 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 275.9% Below is a screenshot of the current open trade profit results from Chuck's Weekly Option Alert Trading Service. There are currently $542,774.66 in open trade profits with an average portfolio return of 275.9% demonstrating the ability of the Optioneering Strategy to deliver substantial returns with no losing trades. Trade Like Chuck Today! You can start receiving hand-picked trades from Chuck today! Chuck is offering special pricing for his Inner Circle Trading Service for Trade of the Day subscribers. 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 Get Chuck's FREE Options eBook Now! ​ Click HERE for Your Copy Unsubscribe Investment Software Inc 22C New Leicester Hwy #117 © 2020 Tradewins Publishing. All rights reserved. The information provided by the newsletters, trading, training and educational products related to various markets (collectively referred to as the "Services") is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by Legacy Publishing, LLC ("Legacy") a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. Past performance is not necessarily indicative of future results. Trading and investing involve substantial risk and is not appropriate for everyone. The actual profit results presented here may vary with the actual profit results presented in other Legacy Publishing LLC publications due to the different strategies and time frames presented in other publications. Trading on margin carries a high level of risk and may not be suitable for all investors. Other than the refund policy detailed elsewhere, Legacy does not make any guarantee or other promise as to any results that may be obtained from using the Services. Legacy disclaims any and all liability for any investment or trading loss sustained by a subscriber. You should trade or invest only "risk capital" – money you can afford to lose. 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