Premium Earnings 11-26-19: Autodesk and Deere

Two names today, one that reports after the close tonight, Autodesk, $ADSK, and one that reports before the open Wednesday, Deere, $DE.

Autodesk, $ADSK

Autodesk, $ADSK, fell from a top in July, finding support at the beginning of August. It bounced along, with one notable push lower, until November. Then it continued higher, and finds itself at the lower end of the consolidation before the drop. Into the report it has a RSI rising to overbought in the bullish zone with the MACD moving up and positive. There is support lower at 162.60 and 157 then 152.25 and 145 before 140. There is resistance above at 172 and 175 then 179. The reaction to the last 6 earnings reports has been a move of about 8.92% on average or $15.30 making for an expected range of 155 to 185.60. The at-the money November 29 Expiry Straddles suggest a smaller $12.00 move by Expiry with Implied Volatility at 95% above the December at 40%. Short interest is moderate at 3.1%. Open interest is biggest from 150 to 167.50 on the Put Side. On the Call side it is biggest at 170 and 190.

Trade Idea 1: Buy the November 29 Expiry 167.50/160 1×2 Put Spread for 30 cents.

Trade Idea 2: Buy the November 29 Expiry 170/175 Call Spread ($2.40) and sell the November 29 Expiry 155 Put for $1.00.

Trade Idea 3: Buy the November 29 Expiry/December 180 Call Calendar ($1.00) and sell the November 29 Expiry 150 Put for 20 cents.

Trade Idea 4: Sell the November 29 Expiry 149/190 Strangle for a $1.65 credit.

#1 gives the downside with leverage and a possible entry at 160. #2 and #3 give the upside using leverage and may put you in the stock at 155 (#2) or 150 (#3). #4 is profitable on a close between 147.35 and 191.65 at Expiry. I prefer #3 or #4.

Deere, $DE

Deere, $DE, started higher off of a higher low in August. It broke above the previous high in October and continued to a top in November. It has created a consolidation zone over the July high since. Into the report it is nearing the top of the zone and has a RSI rising in the bullish zone with the MACD turning to cross up and positive. There is support lower at 175.60 and 171.50 then 163 and 158.50 before 155.50 and 150. There is no resistance above 180. The reaction to the last 6 earnings reports has been a move of about 4.02% on average or $7.15 making for an expected range of 170.50 to 185.25. The at-the money November 29 Expiry Straddles suggest a larger $8.00 move by Expiry with Implied Volatility at 60% above the December at 27%. Short interest is low at 2.1%. Open interest is spread from 157.50 to 175 on the Put Side. On the Call side it builds from 175 to a peak at 180 then tails to 187.50.

Trade Idea 1: Buy the November 29 Expiry 175/170 1×2 Put Spread for 25 cents.

Trade Idea 2: Buy the November 29 Expiry 180/185 Call Spread ($1.75) and sell the November 29 Expiry 170 Put for $0.50.

Trade Idea 3: Buy the November 29 Expiry/December 185 Call Calendar ($0.90) and sell the November 29 Expiry 167.50 Put for $0.15.

Trade Idea 4: Sell the November 29 Expiry 165/190 Strangle for a $1.05 credit.

#1 gives the downside with leverage and a possible entry at 170. #2 and #3 give the upside using leverage and may put you in the stock at 170 (#2) or 167.50 (#3). #4 is profitable on a close between 163.95 to 191.05 at Expiry. I prefer #3 or #4.

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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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