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| Yesterday, we looked at a Daily Price Chart for Tractor Supply Co., noting that TSCO's OBV line is sloping up, valida  May 31st, 2024 Royal Caribbean Cruises Sailing Higher Dear Reader, Yesterday, we looked at a Daily Price Chart for Tractor Supply Co., noting that TSCO's OBV line is sloping up, validating the stock's recent bullish uptrend. For today's Trade of the Day e-letter we will be looking at a daily price chart for Royal Caribbean Cruises, stock symbol: RCL. Before breaking down RCL's daily chart let's first review what products and services the company offers. Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, which comprise a range of itineraries. Now, let's begin to break down the Daily Price chart for RCL stock. Below is a Daily Price chart with the 50-Day EMA and 100-Day EMA for RCL.  50-Day EMA and 100-Day EMA 'Buy' Signal The 50-Day Exponential Moving Average (EMA) and 100-Day EMA are moving average indicator lines that can provide buy and sell signals when used together. When the shorter-term 50-Day EMA crosses above or below the longer-term 100-Day EMA, this provides either a buy or sell signal depending on which direction the stock price is moving.
When the 50-Day EMA (blue line) crosses above the 100-Day EMA (red line) this indicates that the stock's buying pressure has begun to outweigh the selling pressure signaling a 'buy' signal. When the 50-Day EMA crosses below the 100-Day EMA this indicates that the selling pressure has begun to outweigh the buying pressure signaling a 'sell' signal. Buy RCL Stock As the chart shows, on November 9th, the RCL 50-Day EMA, crossed above the 100-Day EMA. This crossover indicated the buying pressure for RCL stock exceeded the selling pressure. For this kind of crossover to occur, a stock has to be in a strong bullish trend. Now, as you can see, the 50-Day EMA is still above the 100-Day EMA meaning the 'buy' signal is still in play. As long as the 50-Day EMA remains above the 100-Day EMA, the stock is more likely to keep trading at new highs and should be purchased. Our initial price target for RCL stock is 152.50 per share. 103.2% Profit Potential for RCL Option Now, since RCL's 50-Day EMA is trading above the 100-Day EMA this means the stock's bullish rally will likely continue. Let's use the Hughes Optioneering calculator to look at the potential returns for a RCL call option purchase. The Call Option Calculator will calculate the profit/loss potential for a call option trade based on the price change of the underlying stock/ETF at option expiration in this example from a flat RCL price to a 12.5% increase. For a limited time, you can join Optioneering Newsletter for just $1 for your first month – that's a massive 97% discount off the regular monthly subscription fee of $39! Don't miss out on this incredible opportunity to elevate your trading game. Trade with Higher Accuracy When you use the 1% Rule to select a RCL in-the-money option strike price, RCL stock only has to increase 1% for the option to breakeven and start profiting! Remember, if you purchase an at-the-money or out-of-the-money call option and the underlying stock closes flat at option expiration it will result in a 100% loss for your option trade! In this example, if RCL stock is flat at 147.91 at option expiration, it will only result in a 5.3% loss for the RCL option compared to a 100% loss for an at-the-money or out-of-the-money call option. Using the 1% Rule to select an option strike price can result in a higher percentage of winning trades compared to at-the-money or out-of-the-money call options. This higher accuracy can give you the discipline needed to become a successful option trader and can help avoid 100% losses when trading options. The goal of this example is to demonstrate the powerful profit potential available from trading options compared to stocks. The prices and returns represented below were calculated based on the current stock and option pricing for RCL on 5/31/2024 before commissions. When you purchase a call option, there is no limit on the profit potential of the call if the underlying stock continues to move up in price. For this specific call option, the calculator analysis below reveals if RCL stock increases 5.0% at option expiration to 155.31 (circled), the call option would make 49.0% before commission. If RCL stock increases 10.0% at option expiration to 162.70 (circled), the call option would make 103.2% before commission and outperform the stock return by 10 to 1*. The leverage provided by call options allows you to maximize potential returns on bullish stocks. The Hughes Optioneering Team is here to help you identify profit opportunities just like this one.  Interested in accessing the Optioneering Calculators? Join one of Chuck's Trading Services for unlimited access! The Optioneering Team has option calculators for six different option strategies that allow you to calculate the profit potential for an option trade before you take the trade. Check out Chuck's PRO Trading Service! I don't want you to miss a single opportunity to potentially reach your goals. That's why I want to share this video I made about my PRO Trading Service. I want you to follow in my footsteps for the opportunity to succeed beyond your wildest dreams, so please call my office at (737) 292-4425 and get started today! Wishing You the Best in Investing Success,  Chuck Hughes Editor, Trade of the Day Have any questions? Email us at dailytrade@chuckstod.com *Trading incurs risk and some people lose money trading.   See Related ArticlesTime to Consider Tractor Supply Co.? RDNT: Small-Cap Health Care Standout Semiconductor ETF Booming Higher  © 2024 Tradewins Publishing. All rights reserved. | Privacy Policy | Terms and Conditions | Contact Us If you didn't create an account using this email address, please ignore this email or unsubscribe using the link below. To ensure delivery of this email to your inbox and to enable images to load in future mailings, please add todaystrade@chuckstod.com to your e-mail address book or safe senders list. DISCLAIMER: Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by Legacy Publishing LLC. For additional information on auto-trading, you may visit the SEC's website: All About Auto-Trading. The information provided by the Legacy Publishing LLC ("Legacy") Trading Services, newsletters and educational publications ("Services") is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by Legacy a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. Past performance is not necessarily indicative of future results. Please note that results may not be typical and can vary from person to person. There are inherent risks involved with investing in the stock and options market, including the loss of your investment. Any investment is at your own risk. You should only trade or invest your "risk capital" – money you can afford to lose. | |||
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