Plenty of Support in Place for Waste Management Stock

WM's 175-strike call could act as a magnet moving forward

Jun 20, 2023 at 10:22 AM

Subscribers to Schaeffer's Weekend Trader options recommendation service received this WM commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

The shares of Waste Management, Inc. (NYSE:WM) have formed a large cup and handle pattern on the charts as they break above their 50-day moving average. This trendline acted as a solid pivot point for both bearish and bullish trends in the past. Breaks above this trendline produced positive returns 67% of the time over the past five years, with an average gain of 7.3%.

WM has also held its 200-day moving average -- which has produced good entry points -- and the year-to-date anchored volume weighted average price (AVWAP). The year-to-date breakeven level served as support over the past two weeks as well.

WT Repost WM June 202023

In terms of options, the shares have bounced at the large 160-strike put level, while the 175-strike call level could act as a magnet moving forward. Our recommended August call has a leverage ratio of 14.1, and will double on a 7.5% pop in the underlying shares.

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