Freebie Earnings Ideas On: Infosys
- Posted by Greg Harmon
- on October 10th, 2013
Infosys, $INFY reports after the close Thursday,
Infosys, $INFY, seems to create a new island after every earnings report, with 6 in a row now. Today it is gapping higher and out of the Bollinger bands with a touch at resistance from the 1st Quarter island. The Relative Strength Index (RSI) is in bullish territory and is moving higher with the Moving Average Convergence Divergence (MACD) indicator crossing higher and starting to rise. The short term bias is to the upside out of this island. There is resistance higher over 50.80 at 52.50 and 54.40 followed by 55.21. Support comes lower at 50 and 48 followed by 46.75 and 45.35 before a gap to 44. The reaction to the last 6 earnings reports has been a move of about 13.13% on average or $6.52 making for an expected range of 44.20 to 57.40. The at-the money October Straddles suggest a smaller $5.60 move by Expiry with Implied Volatility at 89% above the November at 46%. Activity in the options market sees buying of the upside October Calls.
Trade Idea 1: Buy the October 50/55 Call Spread for $2.10.
Trade Idea 2: Buy the October 52.5/55 Call Spread for $0.90.
Trade Idea 3: Sell the October 45 Put for a $0.80 credit.
Trade Idea 4: Buy the October/November 55 Call Calendar for 25 cents.
Trade Idea 5: Sell the October 45/42.5 Put Spread for a 35 cent credit.
Trade Idea 6: Buy the November 52.5/October 55 Call Diagonal Spread for $1.15.
I like #4 or #6 best for upside, and using #5 then #3 for funding.
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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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