Maxxinista Earnings Trade – TJ Maxx

TJX Corporation, $TJX, parent company to the TJ Maxx stores reports earnings in the morning. Are you ready to become a Maxxinista?

TJX Corporation, $TJX

TJX Corporation, $TJX, has run higher out of a summer basing but recently suffered a set back. Now below the 20 day Simple Moving Average (SMA) is has a Relative Strength Index (RSI) that is trending lower with a Moving Average Convergence Divergence (MACD) indicator that is negative and falling. All looks lower, and the Bollinger bands are opening for the fall. Support lower is found at 40 and 38.65 followed by 37.85 and 37. Resistance is found at 41.30 and 42 followed by the previous high at 42.64. The reaction to the last 6 earnings reports has been a move of about 1.8% on average or $0.75 making for an expected range of 39.45 to 40.95. The at-the money Straddles imply a larger move of $1.85 by May Expiry, with good liquidity in the May 40 and 37.5 Puts and the May 42.5 Calls.

Trade Idea 1: Buy the May 40/37.5 Put Spread for $0.65.
Gives a 3.8:1 reward to risk ratio

Trade Idea 2: Buy the May 40/37.5 1×2 Ratio Put Spread for $0.45.
Buying the May 40 Put and selling 2 May 37.5 Puts improves the reward to risk ratio to 5.55:1. If the stock closes under 37.5 on Friday you will own it with a 35 basis.

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
Dragonfly Caps Blog