Weekend Trader Series
June 23, 2024
Open Positions Update
- Please extend the scheduled time-stop date on the BJ’s Wholesale Club (BJ) August 16, 2024, 85-strike call to Monday, July 8.
The following is this week's recommendation:
Walmart (WMT)Place a limit order to buy the Walmart (WMT) August 16, 2024 65-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, June 21, this option was offered at $4.55. WMT closed at $67.91 on Friday, June 21.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 Monday, July 15, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
The shares of Walmart (WMT) hit a record high on Friday, following a brief period of consolidation into their 20-day moving average. On the longer-term monthly graph, the equity broke above a trendline connecting multiple highs since 2014. With this solid technical foundation in place, we’re recommending a new long position on WMT.
Walmart stock’s Schaeffer’s put/call open interest ratio (SOIR) increased from 0.87 to 0.91 after that record high, meaning an unwinding of this pessimism could create more tailwinds for the equity. Plus, short interest rose 26% in the first half of May, and there’s been a slight roll over after earnings.
Our recommended August 65 call has a leverage ratio of 10.72, and will double on a 9.32% pop in the underlying security.
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