COSTCO’S BULLISH RUN: TIME TO BUY?

We all want our picks to move in our favor and I think that COST is a ticker that has a high likelihood of doing just that. Any time we see a stock with freight train momentum it catches our attention, and we immediately look at what it has the power to do for us.

A great way to identify price momentum with that velocity is to look for stocks that have gone above their 52 week high. By coupling that insight with the leverage of options, it can provide big potential wins. Take a look at the chart and then we’ll show you how are able to profit without the stock moving at all.

Any time a stock is pushing in an upward direction, especially above its 52 week high on multiple recent occasions, that momentum will typically continue. Our initial price target for COST stock is 715.00 per share and we are taking a look at what a call option spread could do if COST keep climbing, goes down in price, or doesn’t move at all.

For this option spread, the calculator analysis below reveals the cost of the spread is $285 (circled). The maximum risk for an option spread is the cost of the spread.

The analysis reveals that if COST stock is up at all, flat, or down -7.5% at expiration the spread will realize a 75.4% return (circled). 

*Trading incurs risk and some people lose money trading.