Weekend Trader Series
July 7, 2024
Open Positions Update
- The BJ’s Wholesale Club (BJ) August 16, 2024, 85-strike call reaches its time-stop this Monday, July 8. Close the position at a limit price within range of the current market price when you place the order.
- The Hilton Hotels (HLT) October 18, 2024, 200-strike call reaches its time-stop this Monday, July 8. Close the position at a limit price within range of the current market price when you place the order.
The following is this week's recommendation:
3M (MMM)Place a limit order to buy the 3M (MMM) November 15, 2024 100-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, July 5, this option was offered at $7.75. MMM closed at $101.32 on Friday, July 5.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 29, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
After hitting a May 20, 52-week high, consumer goods stock 3M (MMM) pulled back to its 20-day moving average and $100 century mark. Buying followed a bullish post-earnings reaction in early May, even as retail clients at major brokerages were net sellers during the month. Since then, MMM took out its 2020 low at $97 and later retested that level.
Only four of 12 analysts in coverage rate the equity a "buy." This leaves plenty of room for upgrades as MMM’s technical backdrop improves, especially considering key long-term trendlines are moving higher for the first time in three years.
Our recommended November 100 call has a leverage ratio of 7.8, and will double on a 13.9% rise in the underlying security.
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