March 7th,

2024
Edition

SPX Monthly Chart

On February 29th, the
S&P posted another
end of the month
close above the 10-
month moving
average line. This
shows the continued
bullish signal.
Today will look at one
stock purchase, a call
purchase, and two
option debit spreads.

CNTA
The first profit opportunity is a stock purchase in CNTA, or Centessa Pharmaceuticals
plc. CNTA is a clinical-stage company employing its innovative asset-centric business
model to discover, develop and ultimately deliver impactful medicines to patients.
CNTA Monthly Chart
WT
The monthly chart
shows that CNTA closed
above the moving
average line and
triggered the current
buy signal in April 2023.
During that time, CNTA
has just about tripled in
price.
 CNTA Daily Chart

The daily chart shows that

CNTA went almost straight
up last month. The current
pause gives us a buying
opportunity.
We recommend buying
CNTA stock at the current
price level.

XLV
The next profit opportunity we will review this week is a Call Option purchase in XLV,
or the Health Care Select Sector SPDR Fund ETF. XLV seeks to provide investment
results for the Health Care Select Sector Index.
XLV Monthly Chart

After a long period of

sideways trading, XLV
closed above the moving
average line and gave us the
current buy signal last
November. The next target
is 160.
The daily chart shows that XLV has been trading inside the Upper Keltner Channel
since November. That’s an excellent sign of strength!

XLV Daily Chart

As we said above, we want
to buy a call in XLV. We will
first look at selecting a
strike price for purchasing
an XLV Call Option. XLV is
currently trading at 146.70.
Let’s look at buying the XLV
April 19 130-strike call. The
April 19 options expire in
50 days.

The Call Option Purchase calculator will calculate the profit potential for a call option
purchase trade based on the price change in the underlying stock/ETF at option
expiration in this example from a 12.5% change in stock price to a flat stock price.
We developed what we call the 1% Rule to help us select an option strike price. The 1%
rule says to limit the time value portion of the option to less than 1% of the stock/ETF
price. If you limit the time value portion of an option to 1%, the stock price only
has to move 1% for the option contract to break even and start profiting.
The calculator will also calculate the time value portion of an option. With this option
purchase, the time value is 0.55 points (boxed in red). The time value of 0.55 is less
than 1% of the 146.68 stock price, so this strike price qualifies under the 1% Rule.

Buy to Open the XLV Apr 19 130-Strike Call

The second row from
bottom of the calculator
lists the dollar profit
potential. The bottom row
lists the percent return
profit potential. We can see
that if the XLV stock price
increases 1% at option
expiration (boxed in green)
a 5.3% or $92 profit will be
realized.
There is no limit on the Buy to Open the XLV Apr 19 130-Strike Call
profit potential of a Call
Option purchase if the
underlying stock/ETF •
continues to increase in
price. If XLV increases
10% between now and
option expiration, the Call
Option Purchase
Calculator shows that the
130-strike call will realize
an 81.9% or $1,412 profit
(boxed in green).
On the other hand, if XLV remains flat at option expiration, the 130-Strike Call will
only lose -3.2% or -$55. Remember, if you purchase an at-the-money or out-of-the-
money option and the underlying stock/ETF is flat or down at option expiration, it
could result a 100% loss for your option trade! Using the 1% Rule to select an option
strike price can increase your percentage of winning trades compared to trading at-
the-money or out-of-the- money strikes and this higher accuracy can make you a
more successful trader.
We recommend buying the XLV Apr 19 130-Strike Call at current prices.

PI
The next profit opportunity we will review is in PI, or Impinj, Inc. PI is a provider of
referral and information network radio frequency identification solutions for the retail,
pharmaceutical, healthcare, food and beverage and other industries.

PI Monthly Chart

The monthly chart shows

that PI closed above the
moving average line and
gave us a new buy signal in
January. The next target is
140.
 PI Daily Chart
The daily chart shows that PI
has been in an overall bull
trend since the October low.
There are no signs of a peak
in the movement.
We are going to review a Call
Debit Spread trade for PI.
Traders who want a more
leveraged approach can buy
PI calls.

Buy to Open the PI Apr 19 100-Strike Call

Sell to Open the PI Apr 19 105-Strike Call
We can see from this
Call Option Spread
Analysis that if the PI
stock price declines
by -7.5%, remains flat,
or increases in price
when the options
expire, the trade will
make a 33.3% or $125
profit. That’s the
same profit with a
7.5% swing in either
direction!

CAMT
The last profit opportunity we will review is in CAMT, or Camtek Ltd. CAMT is a
leading manufacturer of metrology and inspection equipment and a provider of
software solutions serving the Advanced Packaging, Memory, MEMS, CMOS Image
Sensors, RF, and other segments in the Semiconductors industry.
 CAMT Monthly Chart

The monthly chart shows that

CAMT has more than tripled in
price since last June. The next
targets are 95 and 100.

CAMT Daily Chart

The daily chart shows that
CAMT has been moving
steadily higher since the chart
started last June. The recent
pause gives us a buying
opportunity.
We are going to review a Call
Debit Spread trade for CAMT.
Traders who want a more
leveraged approach can buy
CAMT calls.

Buy to Open the CAMT May 17 70-Strike Call

Sell to Open the CAMT May 17 80-Strike Call

We can see from this Call

Option Spread Analysis that if
the CAMT stock price declines
by -5%, remains flat, or
increases in price when the
options expire, the spread will
make a 49.3% or $330 profit. If
CAMT is down -7.5% at
expiration, the trade will make
19.2% or $129.
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This week we recommended the following:

Buy CNTA Stock
Buy to Open the XLV Apr 19 130-Strike Call
Buy to Open the PI Apr 19 100-Strike Call
Sell to Open the PI Apr 19 105-Strike Call
Buy to Open the CAMT May 17 70-Strike Call
Sell to Open the CAMT May 17 80-Strike Call

Note: Profit performance displayed in this newsletter does not include

commission cost. Prices are based on Thursday End of Day.

We’ll see you next

week!