Rally Time?

Winning options trades usually start out winners. Wealth Daily editor Briton Ryle explains why he put out an option trade on Qualcomm. If there's one thing he's learned from 20 years of options trading, it's that winning options trades usually start out winners. You are receiving this email because you subscribed to Wealth Daily. [Click here]( to manage your e-mail preferences. [Wealth Daily logo] Rally Time? [Briton Ryle Photo] By [Briton Ryle]( Written Aug. 19, 2019 On Friday, I sent the following message to my Real Income Trader subscribers: There is no opportunity without a little scare first... And in these low-interest-rate, robo-trading days, you gotta manufacture that scare because human emotion is no longer at the helm of day-to-day trading. There are a lot of areas where you might think the president could do a better job. Creating buying opportunities is not one of them. By my count, this is the fifth time he's tanked stocks with his on-again, off-again bromance with Xi. I'm sure some will be tempted to say that Wednesday's beat-down was due to the yield curve inversion, not trade. But why did the curve invert? It's because the trade war is hitting an already weak global economy, and that's pushing central banks toward easing. And you buy bonds when you think rates are going down (because rates get cut to battle weakness/recession). Now, A + B + C doesn't always equal D. And this is where the market's formulaic thinking creates opportunity. Just because the Fed cut rates doesn't mean we are heading into recession and you should buy bonds... The weakness we are seeing is policy-related (trade war, weird stimulus policy in EU), and the Fed has to respond to weakening data no matter the source, and when has global growth not been on the weak side in the last decade? (Oh yeah, there was that one quarter in 2012 where EU growth beat expectations. Ha! That never happened!) The U.S. economy is driven by consumer spending, so really, all you have to do is focus on what the threats to spending are. If corporate America thought the trade war was permanent, they'd act differently. Right now, they are avoiding passing on cost increases to the consumer. And consumer spending is very strong. The market playbook for times like these calls for, like, an eight-day rally. I know, it seems crazy every time. But that's what happens, and the four most dangerous words in investing are "it's different this time." My spidey-sense is telling me Qualcomm. The stock is down ~25% from 52-week highs. It's broken linear support (green line) and sits right at its 50-day MA. And it was relatively strong on Wednesday. Looks ready for a breakout. [qcom 8 16 19] Buy to open the August 76 QCOM call option (symbol: QCOM190830C00076000) at or below $0.85. Now, that last part in bold type is an option trade. A call option. Because the chart is telling me that QCOM is likely to rally nicely... Angel Publishing's First Ever Retirement Seminar: "The Secret to a One-Stock Retirement"... Why a $1 pot stock you’ve probably never heard of could fund your million-dollar retirement. [Click here now for access.]( We're in the Money... There's no need to get into the arcane numerology that makes up an option symbol. There are just three things you need to know about that instruction. One: My readers are taking an upside trade on Qualcomm. Two: This trade will self-destruct next Friday (August 30) at the close of trading. (OK, it doesn't actually self-destruct, but the contract we bought will expire on the 30th.) Three: We are paying $85 per contract for this trade. I don't know why the options people think it's necessary to tell you the price is $0.85 when it will actually cost you $85. I mean, one option contract covers 100 shares of stock, so each share costs $0.85 to control. But you have to control shares in lots of 100, so the cost is $85. Now, Qualcomm was up around $1.60 most of Friday. That's where it was when Real Income Trader subscribers got the trade alert. Qualcomm got a nice late-day rally, and those calls we bought finished the day at $0.98. No, of course we didn't sell. I don't enter into an option trade unless I think we're going to double our money or better. It doesn't always work out that way; our last four trades were closed for gains of 75%, 72%, and 41%, along with a loss of -61%. But I've got a pretty good feeling on this one... I've been trading options for 20 years. And I'll tell you something I've learned: Winning options trades usually start out winners. That is, if your timing is right, you catch the stock while it's moving in the desired direction... and it keeps moving. [19,160% Gains From Gold?]( I’ve identified what I believe to be the #1 gold stock of the decade. If you total all its reserves, the stock could be priced 19,160% HIGHER than the current stock price. And the stock price is under $1. That’s setting the stage for a massive move if gold continues on like I believe it should. [Here’s the #1 stock that could possibly get up to 19,160% gains.]( The Timing Is Right! I've also learned to keep my trading as simple as possible. There are traders out there who scan hundreds of charts a day, looking for the best setups. Not me. I run through that many charts and my eyes start to glaze over... I prefer to keep a stable of stocks — say 8 or 10 — that I'm particularly bullish on for my trading. I've found that most stocks trade with their own rhythm, their own idiosyncrasies. I like to be able to watch a stock for a while before I trade it. Get in tune with it. I find that I tend to lose money when I trade a stock I don't know well. So, Qualcomm. Very bullish on this stock. Did you know its chips will be in every single 5G device on the planet? Yeah. Huge. And it has a forward P/E of 17 and PEG ratio of .78. I haven't actually checked, but I bet it's the only big tech stock with a PEG ratio under 1. Now, obviously, this whole trade war is weighing on Qualcomm. It does a LOT of business with Huawei. And it's got a judge telling it to revise its licensing tactics, which caused a years-long dispute with Apple that only recently ended with Apple licensing Qualcomm chips. If/when these issues get worked out, Qualcomm has at least 30% upside. And just a tempering of the fear that's driven the stock lower gets my Real Income Trader subscribers an easy double today. Until next time, [brit''s sig] Briton Ryle [[follow basic]@BritonRyle on Twitter]( A 21-year veteran of the newsletter business, Briton Ryle is the editor of [The Wealth Advisory]( income stock newsletter, with a focus on top-quality dividend growth stocks and REITs. Briton also manages the [Real Income Trader]( advisory service, where his readers take regular cash payouts using a low-risk covered call option strategy. He also contributes a weekly column to the [Wealth Daily]( e-letter. To learn more about Briton, [click here.]( Enjoy reading this article? [Click here]( to like it and receive similar articles to read! Browse Our Archives [Forget Bitcoin: These Are the Top Assets to Own in a Recession]( [Is Canopy Growth Done Growing?]( [Politics Aside, Betting on the Election Is a Terrible Idea]( [The Secret to Cannabis Bubble Immunity]( [Let the Food Delivery War Begin]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. If you're not sure why you've received this e-letter, or no longer wish to receive it, you may [unsubscribe here](, and view our privacy policy and information on how to manage your subscription. To ensure that you receive future issues of Wealth Daily, please add newsletter@wealthdaily.com to your address book or whitelist within your spam settings. For customer service questions or issues, please contact us for assistance. [Wealth Daily](, Copyright © 2019, [Angel Publishing LLC](. All rights reserved. 111 Market Place #720 Baltimore, MD 21202. The content of this site may not be redistributed without the express written consent of Angel Publishing. Individual editorials, articles and essays appearing on this site may be republished, but only with full attribution of both the author and Wealth Daily as well as a link to www.wealthdaily.com. Your privacy is important to us -- we will never rent or sell your e-mail or personal information. [View our privacy policy here.]( No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. [Wealth Daily]( does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question.