Breakfast at Tiffany’s
- Posted by Greg Harmon
- on May 23rd, 2012
Tiffany’s, $TIF, reports earning tomorrow before the open. The daily chart below shows that it has been in a 15 month symmetrical triangle and is on support at the bottom rail as it heads into earnings. It has a Relative Strength Index (RSI) that is bearish and has just worked of a technically oversold condition with a Moving Average Convergence Divergence (MACD) indicator that is negative but improving. The trend is lower and so is the bias. There is support lower at 60.10 and 58.50 followed by 57.30 and 54.50. After that 50 and 45 come into play. The Measured Move out of
Tiffany’s, $TIF, daily
the triangle lower would take it to 30. Resistance higher is found at 62.10 and 64.20 followed by 66, 67.75 and 69.50. Notice that there is a relative void in volume under 60 until it hits 47.50 and then strong history at 42.50. The reaction to the last 6 earnings reports has been a move of about 7.3% on average or $4.40 making for an expected range of 56.10 to 64.90. The at-the money June Straddles imply a larger move of $6.00 by June Expiry. A quick peak at the weekly chart adds that a move under 59, the 50% Fibonacci retracement of the move higher would look for a continuation to 53.33, the 61.8% level. The RSI is floating lower and the MACD negative on this timeframe. I like a low cost downside play.
Tiffany’s, $TIF, weekly
Trade Idea 1: Buy the June 60 Puts for $2.46.
Trade Idea 2: Buy the June 60/55 Put Spreads for $1.48.
Trade Idea 3: Sell the June 67.5/72.5 Call Spreads for $0.54.
Trade Idea 4: Buy the June 60/55 Put Spreads selling the June 67.5/72.5 Call Spreads for $0.94.
Trade Idea 5: Buy the July 55/50 Put Spread for $0.87.
Trade Idea 6: Buy the June/July 55 Put Calendar Spread for $0.75.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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