Hungry For an Earnings Play on Darden Restaurants

Darden Restaurants (ticker: $DRI) reports earnings after the bell on Thursday. Coming into earnings it has rising off of support of the ascending triangle at 47 and is now testing the top of the triangle at 50. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator both point higher as shown in the chart below. But it is also showing some topping candles with long

upper shadows the past two days. Moving briefly to the weekly chart below shows a strong move off of a higher low with a rising RSI and a MACD about to cross positive.

Trade Idea: Sell July 55/45 Risk Reversal for a Credit.

With support looking pretty strong and a chart biased to the upside you can participate for free by selling the July 45 put and buying the July 55 call. The options board shows an expected move of $1.80 by July 15 expiry. If it is to the upside then you will be rewarded handsomely. At the time of this writing the risk reversal was priced at -10c bid and offered at 5 cents. Give it a shot at zero.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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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.

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