Q2 STOCKS TO BUY

Microchip Call Options Just Tripled in 8 Days

It took less than two weeks for traders to win big on MCHP calls

Managing Editor
Jul 25, 2019 at 12:23 PM
facebook X logo linkedin


Subscribers to Schaeffer's Expiration Week Countdown options recommendation service just tripled their investment on the Microchip Technology Inc. (NASDAQ:MCHP) weekly 7/26 90-strike call trade. Below, we'll explain the factors that went into this short-term options trade hitting its expected target, leaving speculators with a big win.

We initially recommended the call to subscribers on Sunday, July 14. At the time, there had been a bit of a chop to the daily action in July, but MCHP shares had quietly achieved additional credibility on the technical front for the month, as they successfully retested what was shaping up to be solid support at the 80-day moving average.

At the time of the recommendation, MCHP was trading in excess of 50% above its October low and also within 10% of its all-time high. MCHP's 20-day Relative Momentum Index (RMI) flashed a "cover shorts" signal in early June, and appeared to be headed to a "buy" signal as it inched toward 70 -- an event that was likely to be matched by further upside in the shares.

MCHP had also displayed a strong tendency toward condensing big price movement into short time frames, with little time wasted in chops or sideways action. This made the stock a perfect candidate for our short-term trading service, as we targeted a challenge of the May all-time highs north of $100.

However, we warned that July volume for MCHP had thus far been light, and with short interest exceeding 12 days to cover, a pick-up in volume would become a necessary condition for any MCHP rally to persevere to the century mark -- as short selling activity was also likely to quicken in response.

The stock needed to reach an 8% rally to $99 over its two-week life span to achieve our targeted 200% profit. MCHP was choppy for the first week or so of the trade, but caught a major momentum boost this week from earnings-related strength in chip stocks.

The sector-wide rally in the semiconductor sector delivered just the volume boost our trade needed. After a 2% opening bull gap on Wednesday, July 24, daily share volume on Microchip stock hit a new month-to-date high north of 4 million, which likely sparked some short-covering. The stock hit an intraday two-month peak of $100.06, and our recommended weekly 7/26 MCHP 90-strike call achieved its 200% profit, tripling in value for subscribers after less than two weeks.

Daily MCHP with 80MA Entry Exit Dates

 
 

Which of These SUB-$5 Stocks Could 26x From Here? (AD)

He called a rare 11x on Tesla…

Then he called a 26x on Workhorse…

Then an even rarer 35x on Nio Inc…

Now Tim Bohen says these 5 tiny “America First” stocks are next up in 2025.

They’re trading for less than $5 right now.

But thanks to Elon & Trump’s new alliance…

They could be off to the races in Trump’s first 100 days.

And right now for a limited time…

You can get the names & tickers for just $1 here. (AD)

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

🚀 One Stock Pick Could Change Everything in 2025
What if one stock pick could define your success next year? Get 10 expert-vetted stocks set for 2025—plus 5 bonus picks to watch now. Get the Report →

🆕 New Options Need New Trading Strategies
Zero-DTE options are the newest (and hottest) options to trade.  Professional traders have rushed into the market and are making a mint.  Don’t get left behind - learn all about these options, how to trade them, market setups to profit from, plus much more. Download now →

👀 Revealed: 3 Defensive Stocks for Your Portfolio
Worried about the market? This free report reveals 3 under-the-radar defensive stocks for uncertain times in any kind of economy.

 

 
 

FREE Report Download

 

Follow us on X, Follow us on Twitter