Moody’s Corp. in the “Buy Zone”

July 24th, 2020 Moody's Corp. in the "Buy Zone" Dear Reader, Yesterday, we reviewed Zoom Video Communications, Inc. which had been previously featured in the Trade of the Day. We noted that ZM has been performing well and that the stock is still making a series of higher highs and higher lows. For today's Trade of the Day we will be looking at a Keltner Channel chart for Moody's Corp. stock symbol: MCO. Before breaking down MCO's daily Keltner Channel chart let's first review which products and services are offered by the company. Moody's Corporation provides credit ratings and assessment services; and credit, capital markets, and economic research, data, and analytical tools worldwide. It operates through two segments, Moody's Investors Service and Moody's Analytics. The Moody's Investors Service segment publishes credit ratings and provides assessment services on various debt obligations and entities that issue such obligations, such as various corporate and governmental obligations, structured finance securities, and commercial paper programs. Now, let's begin to break down the Keltner Channel chart for MCO. Below is a Daily Price Chart and the three Keltner Channels for Moody's Corp. stock. The Hughes Optioneering Team uses the Keltner Channels as an indicator to determine whether a stock is overbought or oversold. If a stock's daily stock price is trading above the upper Keltner Channel, this signals that the stock is temporarily overbought and subject to a retracement. Even stocks that are in the strongest bull trends do not advance in a straight line. There are always price retracements along the way. When a stock becomes overbought, it's price will typically decline soon after as the inevitable profit taking occurs. The MCO daily price chart shows that the stock is in a strong price uptrend and has become overbought several times. You can see this as MCO has traded above the Upper Keltner Channel on multiple occasions recently. But, in every scenario when MCO became overbought, the stock quickly soon after experienced a pullback. Finding opportunities when a stock experiences a pullback is why the Hughes Optioneering Team uses the Keltner Channels. They help us find a lower-risk entry point. The Keltner Channel "Buy Zone" occurs when a stock is trading below the upper Keltner Channel. Once the daily price is trading below the upper channel, it provides a lower-risk buying opportunity as the stock is likely to rally. Our initial price target for MCO stock is 305.00 per share. 88.2% Profit Potential for MCO Option MCO stock is currently trading below the Upper Keltner Channel, setting up a prime buying opportunity during this bullish run. Let's use the Hughes Optioneering calculator to look at the potential returns for a MCO 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 MCO 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 MCO option example, we used the 1% Rule to select the MCO 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. Investing Champion Gives Away Secret Strategy 10-time Trading Champion Chuck Hughes has been able to generate $ millions in actual profits trading options... ...by using his recession-tested method that has proven to be profitable in almost every type of market condition. Now that he's made his $millions, he's ready to share his secret strategy. Click here for more information. Trade with Higher Accuracy When you use the 1% Rule to select a MCO in-the-money option strike price, MCO 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 MCO stock is flat at 288.12 at option expiration, it will only result in a 7.0% loss for the MCO 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 MCO on 7/23/2020 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 MCO stock increases 5.0% at option expiration to 302.53 (circled), the call option would make 40.6% before commission. If MCO stock increases 10.0% at option expiration to 316.93 (circled), the call option would make 88.2% before commission and outperform the stock return nearly 9 to 1. 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. 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 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. Trading stocks and stock options involves high risk and you can lose the entire principal amount invested or more. There is no guarantee that systems, indicators, or trading signals will result in profits or that they will not produce losses. Some profit examples are based on hypothetical or simulated trading. This means the trades are not actual trades and instead are hypothetical trades based on real market prices at the time the recommendation is disseminated. No actual money is invested, nor are any trades executed. Hypothetical or simulated performance is not necessarily indicative of future results. Hypothetical performance results have many inherent limitations, some of which are described below. Also, the hypothetical results do not include the costs of subscriptions, commissions, or other fees. Because the trades underlying these examples have not actually been executed, the results may understate or overstate the impact of certain market factors, such as lack of liquidity. Legacy makes no representations or warranties that any account will or is likely to achieve profits similar to those shown. No representation is being made that you will achieve profits or the same results as any person providing a testimonial. No representation is being made that any person providing a testimonial is likely to continue to experience profitable trading after the date on which the testimonial was provided, and in fact the person providing the testimonial may have subsequently experienced losses. The cost basis for some of the options in a portfolio may be reduced by rolling over profits at option expiration which is one of the Hughes Optioneering Trade Management Rules. Some income figures presented represent the total amount of option premium collected during the referenced period. Actual profits were less. Open trade profit results may have increased or decreased when the trades were closed out. Chuck Hughes' experiences are not typical. Chuck Hughes is an experienced investor and your results will vary depending on risk tolerance, amount of risk capital utilized, size of trading position, willingness to follow the rules and other factors. _