Weekend Trader Series
May 5, 2024
Open Positions Update
There are no portfolio updates this week.The following is this week's recommendation:
General Electric (GE)Place a limit order to buy the General Electric (GE) July 19, 2024 160-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, May 3, this option was offered at $10.95. GE closed at $164.11 on Friday, May 3.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Tuesday, May 28, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
General Electric (GE) is trending higher, hitting a 52-week high last week after a positive post-earnings reaction. Despite major media headlines like: 'The Dismantling of GE, Once America’s Iconic ‘Everything Company,' GE stock is set up well.
The equity boasts support from its 20-day moving average, which is a trendline that proved to be a solid entry point since a November breakout above last July’s high. GE’s intraday low on Thursday was just above $158, which coincides with its July 2016 peak and short-term resistance in April.
Options are reasonably priced at the moment, considering the equity’s implied volatility (IV) of 26% is below its 63-day historical volatility (HV) of 32%. Our recommended July 290 call has a leverage ratio of 8.9, and will double on a 11.6% rise in the underlying security.
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