Weekend Trader Series
June 16, 2024
Open Positions Update
- Close the Maplebear (CART) July 38-strike put on Monday, June 17. 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:
Hilton Worldwide Holdings (HLT)Place a limit order to buy the Hilton Worldwide Holdings (HLT) October 18, 2024 200-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 14, this option was offered at $19.90. HLT closed at $210.32 on Friday, June 14.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 8, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
After feigning a move below $200 and a trendline connecting higher lows that may have flushed out weaker hands, shares of Hilton Worldwide (HLT) are trading near record highs. The equity also recently broke out above a trendline connecting lower highs and its May high, which could potentially signal the renewal of an uptrend. Now that the stock is trading above its April post-earnings reaction close of $205, it looks like a good time to bet on HLT’s next leg higher.
Of the 25 covering brokerages, just 12 recommend a “buy” rating on the outperforming equity. An unwinding of this pessimism could provide more tailwinds. Plus, short interest is up nearly 50% from February through May, and a majority of these shorts are now underwater after this month’s advance.
Our recommended October 200 call has a leverage ratio of 7.61, and will double on a 14.02% rise in the underlying security.
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