Posts Tagged ‘Adobe’
Monday, December 14th, 2020
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
ADBE has been a regular on the IBD Top 50 list over the past few years and is a favorite among analysts. Check out what the following two reports have to say about it – This Is Adobe’s Must-Hold Support Level if You Buy the Earnings Dip and Adobe (ADBE) Perfectly Positioned for New Highs.
Technicals
Both of the articles linked above discuss a technical outlook for ADBE and for good reason. The stock trades near several moving averages on a daily chart and is also testing support from a rising trendline that originates from a low posted in early November. It’s rare to see such a strong confluence of support lining up in this way and considering the strength this stock has displayed over the years, the odds favor a move to the upside from this point.
ADBE Chart December 2020
If you agree there’s further upside ahead for ADBE, consider this trade which relies on the stock remaining above $475 through the expiration in five weeks.
Buy To Open ADBE 22JAN21 472.5 Puts (ADBE210122P472.5)
Sell To Open ADBE 22JAN21 475 Puts (ADBE210122P475) for a credit of $1.18 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when ADBE was trading near $476. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $116.70. This reduces your buying power by $250 and makes your investment $133.30 ($250 – $116.70). If ADBE closes at any price above $475 on January 22, both options will expire worthless, and your return on the spread would be 88% ($116.70 / $133.30), or 1004% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates December 12, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Tags: ADBE, Adobe, Auto-Trade, Bearish Options Strategies, Bullish Options strategies, Credit Spreads, Earnings Option Strategy, Earnings Play, Monthly Options, Portfolio, Profit, profits, Puts, Risk, SPY, Stocks vs. Stock Options, Terry's Tips, Vertical Put Spread, Weekly Options
Posted in 10K Strategies, Coffee Can Investing, Earnings Announcement Options Strategy, Last Minute Strategy, Lazy Way Strategy, Monthly Options, SPY, Stock Option Trading Idea Of The Week, Stock Options Strategies, Weekly Options | No Comments »
Monday, October 19th, 2020
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
ADBE has doubled from its March low and the following two articles lay out reasons why the stock may continue to gain. One of them even makes a case that the stock is undervalued at current levels, despite to impressive rally as of late – Adobe’s Stock To Continue Growing? and Adobe (ADBE) Up 6.4% Since Last Earnings Report: Can It Continue?
Technicals
After correcting lower last month, ADBE is starting to once again show signs of upward momentum. The stock has posted a series of higher highs and higher lows over the last four weeks as it oscillates higher in a rising trend channel. Buyers have defended the lower line of the channel as well as dips towards the 20-Day moving average. Further, a break above the $500 level earlier this month is a sign of strength. Strong near-term support is seen in the $492-$500 area.
ADBE Chart October 2020
If you agree there’s further upside ahead for ADBE, consider this trade which relies on the stock remaining above the $500 level through the expiration in five weeks.
Buy To Open ADBE 20NOV20 495 Puts (ADBE201120P495)
Sell To Open ADBE 20NOV20 500 Puts (ADBE201120P500) for a credit of $2.08 (selling a vertical)
This credit is $0.02 less than the mid-point of the option spread when ADBE was trading near $503. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will be only $1.30 per spread. Each spread would then yield $206.70. This reduces your buying power by $500 and makes your investment $293.30 ($500 – $206.70). If ADBE closes at any price above $500 on November 20, both options will expire worthless, and your return on the spread would be 70% ($206.70 / $293.30), or 798% annualized.
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates October 17, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Tags: ADBE, Adobe, Auto-Trade, Bullish Options strategies, Credit Spreads, Earnings Option Strategy, implied volatility, Monthly Options, Portfolio, Profit, profits, Puts, Risk, SPY, Stocks vs. Stock Options, Terry's Tips, thinkorswim, Vertical Put Spread, Volatility, Weekly Options
Posted in 10K Strategies, Credit Spreads, Last Minute Strategy, Lazy Way Strategy, Monthly Options, SPY, Stock Option Trading Idea Of The Week, Terry's Tips Portfolios, Weekly Options | No Comments »
Monday, July 20th, 2020
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
Adobe has been a long-term outperformer and the recent dips could offer an attractive entry point for buyers. Check out what the following two analysts have to say about the stock – Here’s Why Adobe (ADBE) Stock Could be a Solid ‘Buy’ in Today’s Market and Is Adobe Stock A Buy Right Now? Here’s What Earnings, ADBE Chart Show.
Technicals
Adobe has corrected lower in the past week and is seen testing a confluence of support. The support area consists of a horizontal level at $423 that previously acted as support in late June as well as the lower bound of a trend channel that has encompassed price action since April. The earlier downside momentum has already subsided which signals that buyers are defending this area. While above $423, the stock has the potential to continue higher, in line with the trend from the low in March.
ADBE Chart July 2020
If you agree there’s further upside ahead for ADBE, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.
Buy To Open ADBE 21AUG20 425 Puts (ADBE200821P425)
Sell To Open ADBE 21AUG20 430 Puts (ADBE200821P430) for a credit of $2.15 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when ADBE was trading near $432. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $1.30 per spread. Each contract would then yield $213.70 and your broker would charge a $500 maintenance fee, making your investment $286.30 ($500 – $213.70). If ADBE closes at any price above $430 on August 21, both options would expire worthless, and your return on the spread would be 75% (855% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates July 18, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Tags: ADBE, Adobe, Auto-Trade, Bearish Options Strategies, Bullish Options strategies, Coronavirus, COVID-19, Credit Spreads, diagonal spreads, Earnings Announcement, Earnings Option Strategy, implied volatility, Monthly Options, Options Tutorial Program, Portfolio, Profit, profits, Puts, Risk, Stocks vs. Stock Options, Terry's Tips, thinkorswim, Vertical Put Spread, Volatility, Weekly Options
Posted in 10K Strategies, Andy's Market Report, Last Minute Strategy, Lazy Way Strategy, Monthly Options, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
Monday, April 13th, 2020
This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies. We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.
With the markets gaining upward momentum, several analysts have had good things to say about Adobe. Here is what the IBD thinks about the stock – Is Adobe Stock A Buy Right Now? Here’s What Earnings, ADBE Chart Show. Also take a look at the following article which makes a case that the company is in a good position to handle the impact of the Coronavirus – Adobe: A Resilient Software Giant
Technicals
The main technical development for ADBE as of late is that it has comfortably regained its 200-day moving average. This particular indicator has drawn buyers in the past and dips below it have generally been short-lived in the recent past. The stock appears to be building a base for its next move higher. Further, the monthly candle for March signals that there was strong buying after the dip below $300. Over the near-term, the $327 price point has proven to be a small hurdle. A break above can lead to a rally towards $360 which is a significant technical area for the stock.
ADBE Chart April 2020
If you agree there’s further upside ahead for ADBE, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least a little bit.
Buy To Open ADBE 15MAY20 315 Puts (ADBE200515P315)
Sell To Open ADBE 15MAY20 320 Puts (ADBE200515P320) for a credit of $1.60 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when ADBE was trading near $319. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $1.30 per spread. Each contract would then yield $158.70 and your broker would charge a $500 maintenance fee, making your investment $341.30 ($500 – $158.70). If ADBE closes at any price above $320 on May 15, both options would expire worthless, and your return on the spread would be 46% (525% annualized).
Changes to Investor’s Business Daily (IBD) Top 50 This Week:
IBD Underlying Updates April 11, 2020
We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run. Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.
As with all investments, you should only make option trades with money that you can truly afford to lose.
Happy trading,
Terry
Tags: ADBE, Adobe, Auto-Trade, Bullish Options strategies, Coronavirus, COVID-19, implied volatility, Options Tutorial Program, Portfolio, Profit, profits, Puts, Risk, SPY, Stocks vs. Stock Options, Terry's Tips, thinkorswim, Vertical Put Spread, Volatility, Weekly Options
Posted in 10K Strategies, Last Minute Strategy, Stock Option Trading Idea Of The Week, Stock Options Strategies, Terry's Tips Portfolios, Weekly Options | No Comments »
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