Adobe Earnings Plays
- Posted by Greg Harmon
- on September 19th, 2012
One other name that reports Wednesday night after the close is Adobe, $ADBE.
Running into earnings it has been doing nothing. Perhaps a bottoming process as the 200 day Simple Moving Average (SMA) is slowly rising. Not exciting. It has a Relative Strength Index (RSI) that is slightly bullish with a Moving Average Convergence Divergence (MACD) indicator that is positive but barely. No excitement here either. Set up is for further weakness in the uptrend. There is support lower at 32.10 and 31.20 followed by 29.80. Resistance is found at 33.25 and 34 followed by 34.75. The reaction to the last 6 earnings reports has been a move of about 3% on average or $1.00 making for an expected range of 31.90 to 33.90. The at-the money Straddles suggest a roughly $2.15 move by Expiry Friday with Implied Volatility over 100% in the September options above the historical at 20% and the October at 37%. This sets up well for volatility plays.
Trade Idea 1: Sell the September 33 Straddle for $2.15 credit.
Trade Idea 2: Sell the September 33 Straddle and buy the October 33 Straddle for $0.75.
Trade Idea 3: Sell the September 31/34 Strangle for $0.92 credit.
Trade Idea 4: Sell the September 31/34 Strangle and buy the October 31/34 Strangle 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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