Optioneering Newsletter

May 14, 2017

Mini Dow Futures Weekly

Trading since last month’s low suggests that the pause is over and the
uptrend is resuming. The next targets are 22,500 and 24,000.

The first profit opportunity we will review this week is in MDCO, or The
Medicines Company. The Medicines Company is engaged in acquiring,
developing, and marketing specialty pharmaceutical products, primarily for
cardiovascular conditions.
 MDC Monthly

The monthly chart shows that the overall trend in MDCO has been up since
2010.
 MDCO Daily

The daily chart for MDCO shows a major breakout in February followed by a
deep, one-day pullback to the breakout point that finished with a big bullish
reversal. The big bullish reversal still points to a further advance. The
pullback below the Mid-Line of the Keltner Channel gives us a buying
opportunity.

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

Traders who want a more leveraged approach could consider buying MDCO
calls. MDCO has options expiring in May, June, July, October, January 2018,
and January 2019.
 Buy to Open MDCO June 16th expiration 35-strike Call
Sell to Open MDCO June 16th expiration 45-strike Call

We can see from the Call Option Spread Analysis Calculator that if the
MDCO stock price declines by -5%, stays the same as it is now, or increases
in price when the options expire, the spread will show a profit of 35.1% or
$260. If MDCO is down -7.5% when the options expire, the spread will make
20.3% or $150.

The next profit opportunity we will consider is in TNA. TNA is the Direxion
Daily Small Cap Bull 3x Shares ETF. TNA strives to achieve daily results that
are 300% of the performance of the Russell 2000 Small Cap Index.
 TNA Monthly

TNA hit a new record high last month. New record highs are bullish.
 TNA Daily

As we said above, TNA hit a new record high last month. The pullback below
the Mid-Line of the Keltner Channel gives us a new buying opportunity.

TNA is a leveraged ETF. While leveraged ETFs contain more risk, they
usually possess higher premiums as a result. We suggest taking advantage
of the high premiums offered by initiating option debit spreads. We will review
a call option debit spread for TNA.

Traders who want a more leveraged approach could consider buying TNA
calls. TNA has options expiring weekly until June 30th. After that, TNA has
options expiring in July, October, January 2018, and January 2019.
 Buy to Open TNA July 21st expiration 40-strike Call
Sell to Open TNA July 21st expiration 50-strike Call

We can see from the Call Option Spread Analysis Calculator that if the TNA
ETF price declines by -2.5%, stays the same as it is now, or increases in
price at all when the options expire, the spread will show a profit of 30.7% or
$235. If TNA is down -5% at expiration, the profit will be 28.2% or $216. If
TNA is down -7.5% when the options expire, the spread will make 11.1% or
$85.

The next profit opportunity we will review this week is in KITE, or Kite
Pharma, Inc. Kite Pharma is dedicated to achieving one of the most
ambitious goals of 21st century medicine: curing cancer.
 Kite Monthly

The monthly chart shows that the trend is up. A break through the flat top
near 90 could result in a significant advance.
 KITE Daily

The trend on the daily chart is clearly up. The three-waved pullback gives
us a new buying opportunity.
 Buy to Open KITE June 16th expiration 60-strike Call
Sell to Open KITE June 16th expiration 70-strike Call

We can see from the Call Option Spread Analysis Calculator that if the KITE
stock price declines by -5%, stays where it is, or increases in price when the
options expire, the spread will make a 35.1%, or $260 profit. If KITE is down
-7.5% when the options expire, the spread will make 32.1% or $237.

The last profit opportunity we will consider this week is in LABU. LABU is the
Direxion Daily S&P Biotech Bull 3X Shares ETF. LABU seeks daily
investment results, before fees and expenses, of 300% of the performance of
the S&P Biotechnology Select Industry Index.
 LABU Weekly

The weekly chart shows that LABU made a low early last year. Every swing
low since then has made a higher low bottom. The consistent pattern of
higher lows points to a further advance.
 LABU Daily

The daily chart is similar to the weekly chart. The pattern is bullish. It’s not
dynamically bullish yet, but it’s getting there. A break through resistance at
the fall high could result in a significant advance.

LABU is a leveraged ETF. As we said above, while leveraged ETFs contain

more risk, they usually possess higher premiums as a result. We suggest
taking advantage of the high premiums offered by initiating option debit
spreads. We will review a call option debit spread for LABU.

We are going to review a Call Debit spread for LABU.

Traders who want more leverage can buy LABU calls. LABU has options
expiring in May, June, July, September, and December.
 Buy to Open LABU July 21st expiration 35-strike Call
Sell to Open LABU July 21st expiration 45-strike Call

We can see from the Call Option Spread Analysis Calculator that if the LABU
ETF price declines by -5%, stays where it is, or increases in price when the
options expire, the spread will make a 43.9%, or $305 profit. If LABU is down
-7.5% when the options expire, the spread will make 41.9% or $291.

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