Weekend Trader Alert

Weekend Trader Series

October 23, 2022

Open Positions Update

  • Please extend the scheduled time-stop date on the Workday (WDAY) December 16, 2022, 160-strike put to Monday, November 7.
  • Close the Allstate (ALL) January 20, 2023, 125-strike call on Monday, October 24. Close the position at a limit price within the range of the current market price when you place the order.
  • Close the Hilton (HLT) January 20, 2023, 130-strike put on Monday, October 24. Close the position at a limit price within the range of the current market price when you place the order.

The following is this week's recommendation:

TJX Companies (TJX)

Place a limit order to buy the TJX Companies (TJX) January 20, 2023 62.50-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, October 21, this option was offered at $8.10. TJX closed at $67.61 on Friday, October 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, November 21, 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 TJX Companies (TJX) broke out of a downtrend from August through October, and are currently above all daily and weekly trendlines. Furthermore, the stock is higher than the $64.50-$63.50 pivot that tends to produce volatile moves with moving averages trending higher that had previously been flat. Now, with TJX on an upwswing after bouncing off its year-over-year breakeven level this week, it looks like a good time to weigh in with calls.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TJX’s 50-day put/call volume ratio recently peaked above 1.25 and has been unwinding since. Past peaks such as this have set up multi-month runs.
Despite the bullish tilt, analysts haven’t been more bearish in the past few years. Of the 25 analysts in coverage, six carry a tepid “hold” rating on TJX. Our recommended January 2023 62.50-strike call has a leverage ratio of 6 and will double in value on a 16.2% pop in the underlying shares.

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