Teradyne Stock Hitting New Highs

July 20th, 2020 Teradyne Stock Hitting New Highs Dear Reader, On Friday, we looked at a Monthly Price Chart of Activision Blizzard Inc., noting the stock's on a PowerTrend buy signal. For today's Trade of the Day we will be looking at a Daily Price chart for the Teradyne, Inc., symbol: TER. Before breaking down TER's daily price chart let's first review what products and services the company offers. Teradyne, Inc. designs, develops, manufactures, sells, and supports automatic test equipment worldwide. The company operates through Semiconductor Test, System Test, Industrial Automation, and Wireless Test segments. Now, let's begin to break down the Daily Price chart for TER. Below is a Daily Price Chart with the price line displayed by a solid line. The Daily Price chart above shows that the TER has been hitting new 52-Week Highs regularly since early June. 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 is a good candidate for a covered call trade. Our initial price target for the TER is 95.05 per share. Profit if TER Is Down 10% Now, since TER is making a series of 52-week highs and the stock will likely rally from here, let's use the Optioneering calculator to look at the potential returns for a TER covered call trade. Covered calls are also known as buy writes. The Buy Write Calculator will calculate the profit/loss potential for a covered call trade based on the price change of the underlying stock/ETF at option expiration in this example from a 10% increase to a 10% decrease in TER stock at option expiration. The goal of this example is to demonstrate the 'built in' profit potential for covered calls and the ability of covered calls 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 price used in the profit/loss calculation. The prices and returns represented below were calculated based on the current stock and option pricing for TER on 7/17/2020 before commissions. Protective Puts Can Create Powerful Spreads Learn more about this Option Secret Here Built in Profit Potential For this covered call, the calculator analysis below reveals the cost or the breakeven price is $6,727 (circled). The maximum risk for a covered call is the cost of the covered call. The analysis reveals that if TER is flat at 86.42 at expiration the covered call will realize a $1,773.00 profit and a 26.4% return (circled). If TER increases 10.0% at option expiration, the covered call will realize a $1,7773.00 profit and a 26.4% return. And if TER decreases 10% at option expiration, the covered call will realize a $1,050.80 profit and an 15.6% return. Due to option pricing characteristics, this covered call has a 'built in' 26.4% profit potential when the trade was initiated. Covered call trades can result in a higher percentage of winning trades compared to a directional stock 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 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 Inner Circle Trading Service Skip the headaches and years of learning and start getting Chuck's hand-picked trades today by signing up for Chuck's Inner Circle Trading Service. Now is your best opportunity to join us. Become a member today. Just call Brad in my office at 1-866-661-5664 or 1-310-647-5664 . Wishing You the Best in Investing Success, Chuck Hughes Editor, Trade of The Day Have any questions? Email us at dailytrade@chuckstod.com Start Today for Just $1 Unsubscribe Investment Software Inc 22C New Leicester Hwy #117 © 2020 Tradewins Publishing. All rights reserved. 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