4 Trade Ideas for Adobe: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Adobe, $ADBE, ran from a low in October 2019 to a top in February, bouncing off of the 20 day SMA a couple of times as support. Then it gapped down through the 20 day SMA and the trend changed. it dropped in choppy trading to a low in mid-March, undercutting the October low intraday. That day it printed a Hammer Candle, and it was confirmed as a reversal the following day with a move higher. It consolidated there around the 200 day SMA until a gap up two weeks ago.

After a short run higher it stalled over the 50 day SMA and a 61.8% retracement of the drop and then pulled back. It has now made a higher low and is moving back up toward resistance. The RSI is rising towards a move over 60 into the bullish zone with the MACD positive and turning back higher. The Bollinger Bands® have also opened higher. There is resistance at 350 and 362.50 then 386.50. Support lower comes at 334 and 328 then 320.

The stock does not pay a dividend. The company is expected to report earnings next on June 11th. The May options chain shows the biggest open interest at the 300 strike on the put side. It is biggest at 390 and then 385 on the call side. June options have biggest open interest at the 275 put, and much smaller at the 320 and 380 call.

Adobe, Ticker: $ADBE

Trade Idea 1: Buy the stock on a move over 350 with a stop at 340.

Trade Idea 2: Buy the stock on a move over 350 and add a May 340/320 Put Spread ($6.30) while selling the June 385 Call ($6.60).

Trade Idea 3: Buy the May/June 370 Call Calendar ($9.00) and sell the May 300 Put ($1.85).

Trade Idea 4: Buy the June 275/355/375 Call Spread Risk Reversal for $6.00.

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the last week of April, saw equity markets showed resilience, holding up in the face of a massive move in Crude Oil.

Elsewhere look for Gold to continue higher while Crude Oil may be pausing in the downtrend. The US Dollar Index continues to tighten its consolidation while US Treasuries remain in an uptrend. The Shanghai Composite looks to continue in broad consolidation while Emerging Markets pause in their short term uptrend.

The Volatility Index looks to remain elevated but continuing to move lower, making the path easier for equity markets to the upside. Their charts have hit the pause button on the shorter timeframe. On the longer timeframe the QQQ remains the strongest and has erased more of the drop than the SPY and IWM even less. All 3 are stalled at key retracement levels with the QQQ at a 61.8% retracement, the SPY 50%, and the IWM 38.2%. Use this information as you prepare for the coming week and trad’em well.

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.

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