Optioneering Newsletter

April 8, 2018

Mini Dow Futures Monthly

We trade with the trend and the long-term trend is up. The bears have had
the momentum recently. The current pullback is expected to be followed by
a continued bull trend.

The first profit opportunity we will review this week is in NFLX, or Netflix.
Netflix is the world’s leading streaming television network. As of January 2018,
Netflix had 117.58 million paying subscribers worldwide, including 54.75
million in the United States.
 NFLX Monthly

The monthly chart shows that NFLX hit a new record high last month. New
record highs are bullish.
 NFLX Daily

The daily chart for NFLX is clearly bullish. The pullback to the Lower Keltner
Channel gives us a buying opportunity.

We are going to review a call debit spread for NFLX.

Traders who want a more leveraged approach could consider buying NFLX
calls. NFLX has options expiring every week until May 25th. After that, NFLX
has options expiring in June, September, January 2019, and January 2020.
 Buy to Open NFLX May 18th expiration 255-strike Call
Sell to Open NFLX May 18th expiration 270-strike Call

We can see from the Call Option Spread Analysis Calculator that if the NFLX
stock price declines by -5%, stays where it is, or increases when the options
expire, the spread will make a 36.4%, or $400 profit. If the NFLX stock price is
down -7.5% when the options expire, the spread will make a 10.8% or $119
profit.

The next profit opportunity we will review this week is in EDU, or New Oriental
Education & Technology Group Inc. New Oriental is a provider of private
educational services in China. New Oriental is the largest comprehensive
private educational company in China based on the number of program
offerings, total student enrollments, and geographic presence.
 EDU Monthly

The monthly chart shows that EDU has been in a very strong bull trend since
2015. The pullback from this year’s record high is expected to yield to a further
advance.
 EDU Daily

The daily chart displays a clear bullish pattern of high highs and higher lows.
The pullback to the Mid-Line of the Keltner Channel gives us a buying
opportunity.

We are going to review a Call Debit Spread trade for EDU.

Traders who want a more leveraged approach can buy EDU calls. EDU has
options expiring in April, May, July, October, December, January 2018, and
December 2018.
 Buy to Open EDU May 18th 75-Strike Call
Sell to Open EDU May 18th 85-Strike Call

We can see from the Call Option Spread Analysis Calculator that if the EDU
stock price declines by -2.5%, stays where it is, or increases in price when the
options expire, the spread will make a 33.3% or $250 profit. If EDU is down
-5% when the options expire, the profit will be 23.8% or $178. If EDU is down
-7.5% when the options expire, the spread will lose -5.8% or -$43.

The next profit opportunity we are going to review is DQ, or Daqo New Energy
Corporation. DQ manufactures and sells polysilicon to photovoltaic product
manufacturers, who further process the polysilicon into ingots, wafers, cells
and modules for solar power solutions.
 DQ Monthly

The monthly chart shows that DQ has been in a strong bull trend since last
year’s low. The pullback from this year’s high is expected to yield to a further
advance.
 DQ Daily

The daily chart depicts a normal 3-wave correction since the January high.
Recent trading suggests that the correction could be over and the uptrend
could be resuming.

We are going to review a Call Debit Spread for DQ.

Traders who want more leverage can buy DQ calls. DQ has options expiring
in April, May, July, and October.
 Buy to Open DQ May 18th expiration 40-strike Call
Sell to Open DQ May 18th expiration 55-strike Call

We can see from the Call Option Spread Analysis Calculator that if the DQ
stock price stays where it is or increases in price when the options expire, the
spread will show a profit of 39.5% or $425. If the DQ price at expiration is
down -2.5%, the spread will make a 34.4% or $369 profit. If DQ is down -5%
when the options expire, the profit will be 21.4% or $230. If DQ is down
-7.5% when the options expire, the spread will make an 8.4% or $90 profit.

The last profit opportunity we will review this week is in WIX, or WIX.COM Ltd.
Wix.com is a cloud-based web development platform. WIX allows users to
create HTML5 web sites and mobile sites through the use of online drag and
drop tools.
 WIX Monthly

The monthly chart shows that WIX more than quadrupled in price from the
2016 low to year’s low to this year’s high. That’s a very strong stock!
 WIX Daily

The daily chart shows that WIX us hit a new record high on March 21st. New
record highs are bullish. The pullback toward the Mid-Line of the Keltner
Channel gives us a new buying opportunity.

We are going to review a Call Debit Spread for WIX.

Traders who want a more leveraged approach could consider buying WIX
calls. WIX has options expiring in April, May, July, October, January 2019, and
January 2020.
 Buy to Open WIX May 18th expiration 65-strike Call
Sell to Open WIX May 18th expiration 80-strike Call

We can see from the Call Option Spread Analysis Calculator that if the WIX
stock price is down -2.5%, stays where it is, or increases in price when the
options expire, the spread will make at least 39.5% or $420. If WIX is down
-5% when the options expire, the profit will be 20.2% or $216. If WIX is down
-7.5% when the options expire, the spread will make a tiny 1.0% or $11
profit.

EARNINGS SEASON: There are four “Earnings Seasons” a year. The

seasons begin in January, April, July, and October and they each last
about two months. The earnings reports can have an impact on the stock
price. We don’t know if the impact is going to be positive or negative (or
nothing at all). It’s up to you to decide if you want to be in a trade when the
earnings report is announced. Here’s a link for a page that can help you
keep track of the report dates:

https://www.earningswhispers.com/calendar
 Note: Profit performance displayed in this newsletter does not include transaction
costs.

This newsletter includes some trading ideas following Chuck Hughes’ trading
strategies along with educational information. For a complete listing of Chuck’s
exact trades, including specific entries and exits and real time Portfolio tracking,
please call Brad at 1- 866-661-5664 or 310-647-5664