Quick Picks - September 1st 2020

Hi Seekers,

Thank you for joining me on our first edition of “Quick Picks.” As I explained in the newsletter yesterday, due to the content and value I continue to look to add to the newsletter, I have run into a data max issue here on Substack, as such, I have split the newsletter up into segments. This allows me to deliver the same content without shorting you on value.

In this segment, my goal is to give you a look into some trades I am looking at during the week. As you are already aware, I am a long-term investor, meaning the majority of my positions are buy and hold type positions. However, I do set aside a portion of my portfolio for options and some short-term trades.

These positions I look at in this segment could be either short or long-term holds, but I will try to identify what I plan on doing with each trade mentioned.

Disclaimer: I am not a financial advisor and this newsletter is intended for informational and educational purposes only.

Let’s get started!

Quick Picks

#1 Slack Technologies (WORK)

This is a trade I made before the bell on Monday afternoon, with the intention of holding through earnings, however I will see how the stock trades today to determine if I sell and take my profits today.

I bought $WORK Sept 11 $32.50 Calls for $2.59/contract

What this means is paid $259 ($2.59 x 100) per contract. Each contract is equivalent to 100 shares. If I choose to hold these option contracts until expiration, and the share price of WORK is above $32.50, I have the option of buying shares from the option seller at that rate.

Example, on September 11th, shares of WORK trade at $35, I get to buy them at $32.50 and immediately have a $2.50/share gain.

Option contracts trade like stock prices, just in a more volatile manner, so you should be very careful when trading options.

Looking at the chart below, the RSI trades at 65, which is getting high, but still has some room to run. The share price bounced off the $27.61 support level (green line) last week and has been trending higher ever since. It broke through the $30 resistance line and is now heading for the $34 resistance level before looking to re-test new all-time highs.

Zoom Video (ZM) reported strong earnings last night, which has boosted shares of WORK in the after hours session, so these options should see a nice boost today.

Disclosure: I own options and shares of $WORK. Options are a short-term play and shares are a long-term play

#2 Teladoc Health (TDOC)

Teladoc is a name I have been watching closely of late since there acquisition of Livongo Health (LVGO) announced early last month. The stock has a STRONG support level around $182 and a decent support level around $207. The stock has traded off the $207 level for 6 consecutive days now, so a LONG position or even options would be a good play around $207/$208.

If the stock holds these levels, we could see it retest the $240 level or even its all-time high level of $250.

I believe the company has a bright future with the convenience of a doctors visit over video chat. This is something that was growing prior to the pandemic and will only grow further during and after the pandemic.

Disclosure: I currently do not have any positions in TDOC

#3 Raytheon Technologies (RTX)

Those of you that have been following me for awhile know I am a big fan of the Defense sector right now. I believe it is one of the few areas where you can find some undervalued high-quality stocks. One of those names is none other than Raytheon Technologies.

RTX currently trades at an RSI of 48, which is a good level. The MACD is flat. The shares have bumped up against the $62 resistance level for a couple weeks now. If the stock can break through, we could see it move towards the $66 level and then onto the $69 resistance levels, which will be a tougher one to breakthrough.

I believe the stock will trade in these areas until the election is completed and there short-term future becomes more clear. One thing that is clear is the fact that Defense is a essential and technology is always changing.

I have been buying shares in the low $60s for the past few weeks due to the valuation being so low. This is a long-term buy for me.

Disclosure: I am LONG shares of RTX

Thank you for Reading!

If you have any questions at all on the information above, please do not hesitate to email me at Dividend. [email protected] or DM me on Twitter.

Have a great week!