27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
In a recent video posted on CNBC, renowned technician Carter Worth made a case that shares of Altria Group Inc (NYSE: MO) have become too far extended both technically and fundamentally.
On the fundamental side, Altria is trading on a PE ratio if 21. According to Worth, that's incredibly high compared to the ratio of between 1 and 4 that was seen in the early 2000s.
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It is actually the highest multiple the stock has traded at for over 15 years.
Altria's dividend yield has also dropped to historically low levels of around 4 percent.
Compare that to over 30 percent seen twenty years ago. Altria has certainly benefited from the chase for yield, he said. Now, Worth thinks it has come much too far.
According to Worth, "When you're too far above trend, you check back."
Technically, Altria is trading significantly higher than the 150 day moving average. In addition to that, the stock has failed to make new highs with the broader market and the bearish divergence appearing on the RSI indicator look fairly ominous.
Worth's target is $45, which is 10 percent below the current stock price.
That also coincides with the 150-day moving average.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.