Premium Earnings 6-6-12: Bud and Lululemon
- Posted by Greg Harmon
- on June 6th, 2012
Anheuser-Busch InBev, $BUD
Anheuser-Busch InBev, $BUD, is trying to move higher off of a potential bottom at 65 last week. The Relative Strength Index (RSI) is remains bearish but is bouncing off the technically oversold level and pressing over 40 with a Moving Average Convergence Divergence (MACD) indicator that remains negative but is improving towards a positive cross. There is resistance higher at 67.60 and 68.85 followed by 70 and 72.20. Support lower comes at 66.50 and 64.85 followed by 62.80, 61.45 and 60. I like it higher in the summer. The reaction to the last 6 earnings reports has been a move of about 4.7% on average or $3.10 making for an expected range of 64.20 to 70.40. The at-the money June Straddles imply a smaller move of $2.20 by June Expiry.
Trade Idea 1: Sell the July 60 Put for 40 cents.
Trade Idea 2: Buy the June 70 Call for $0.30.
Trade Idea 3: Buy the June 67.5/70 Call Spread for $1.10.
Trade Idea 4: Buy the June 67.5/70 Call Spread selling the July 60 Put for $0.70.
Trade Idea 5: Buy the July 67.5/70/72.5 Call Butterfly for $0.70.
I traded #5 at 50c. Since taking the trade my source for earnings reports changed the date to 6/21. Upon a review of the previous reports it looks more likely that they do not report until mid August.
lululemon athletica, $LULU
lululemon athletica, $LULU, has been consolidating between the 50 and 100 day Simple Moving Averages (SMA) after a small pullback from the top over 81. The RSI is turned back higher with a MACD indicator that is flat. There is resistance higher at 74.75 and 77.25 followed by the top at 81.09. Support lower comes at 70.75 and 69 followed by 67.10 and 64.25 then the gap at 59.35. Short interest is high at 13%. I like it higher eventually. The reaction to the last 6 earnings reports has been a move of about 5.9% on average or $4.05 making for an expected range of 68.15 to 76.25. The at-the money weekly Straddles imply a larger move of $5.45 and the June Straddles imply a move of $6.65 by June Expiry.
Trade Idea 1: Buy the June8w/June Monthly 75 Call Calendar Spread for $0.58.
Trade Idea 2: Buy the June8w 75/77.5 Call Spread for $0.68.
Trade Idea 3: Buy the June/July 77.5 Call Calendar Spread for $1.70.
Trade Idea 4: Sell the July 60 Put for $1.55.
Trade Idea 5: Buy the June/July 77.5 Call Calendar Spread selling the July 60 Put for $0.15.
I traded #5 at 8 cents
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
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)
Dragonfly Capital Updates
- Top Trade Ideas for the Week of May 20, 2013: The Rest Premium
- Top Trade Ideas for the Week of May 20, 2013: The Best
- SPY Trends and Influencers May 18, 2013
- Cleveland’s Best Linkfest!
- Macro Week in Review/Preview May 17, 2013
- Dragonfly Capital Views Performance Through May 2013 Expiry
- Premium Earnings 5-17-13
- Which Way is Up?
- Cicso Kid Was a Friend of Mine
- Premium Earnings 5-16-13