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Posts Tagged ‘Earnings Announcement’

Darden Restaurants (DRI) Earnings Keep Rally Going

Monday, March 29th, 2021

On Thursday, DRI – whose brands include Olive Garden, Longhorn Steakhouse and The Capital Grille – reported earnings that blew out expectations on both revenue and profits. The company also announced that its dividend would more than double along with a $500 million share repurchase program. The news was warmly greeted by the Street, which showered the dine-in chain conglomerate with a slew of target price increases that ranged as high as $165 (the stock closed Friday at $149). The shares gained more than 11% in the two days following the earnings news, hitting yet another all-time high on Friday.

To say DRI is in rally mode would be a gross understatement. Since bottoming last April, the stock has rocketed 245% higher. Already this year, DRI has gained 25%. The rally has proceeded largely along DRI’s 20-day moving average, with the 50-day moving average lending support on pullbacks. With strong fundamentals in place and a recent uptick in same-store sales, there’s ample reason to believe the rally should continue as customers return to DRI’s varied dining rooms.

DRI Chart March 2021 - Earnings Beat Expectations

DRI Chart March 2021

If you agree that DRI’s rally has legs, consider the following trade that relies on the stock remaining above $145 through expiration in eight weeks.

Buy to Open DRI 21May21 140 Put (DRI210521P140)
Sell to Open DRI 21May21 145 Put (DRI210521P145) for a credit of $1.90 (selling a vertical)

This credit is $0.05 less than the mid-point of the option spread when DRI was trading just below $149. 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 $188.70. This trade reduces your buying power by $500 and makes your investment $311.30 ($500 – $188.70).  If DRI closes above $145 on May 21, both options will expire worthless and your return on the spread would be 61% ($188.70 / $311.30).

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Should You Buy Amazon (AMZN) Following Its Earnings Report?

Monday, August 10th, 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.

Amazon had a strong quarter and the following two articles outline the earnings report and why the stock may head higher from here – Amazon (AMZN) Q2 Earnings and Revenues Top Estimates and Why Amazon Stock Climbed 14% Last Month.

Technicals

From a technical perspective, AMZN was held lower by a horizontal resistance level near $3250 on the rally that followed the recent earnings report. However, from a broader perspective, the stock has been firmly bid from a rising trendline that originates back to a low posted in March. Considering how long this trendline has been in place, and the long-term trend, the resistance at $3250 does not appear to be a big hurdle and it may only be a matter of time before this stock is trading at fresh all-time highs.

AMZN Chart August 2020 earnings announcment

AMZN Chart August 2020

If you agree there’s further upside ahead for AMZN, 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 AMZN 11SEP20 3160 Puts (AMZN200811P3160)
Sell To Open AMZN 11SEP20 3165 Puts (AMZN200811P3165) for a credit of $2.40 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when AMZN was trading near $3165.  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 $238.70 and your broker would charge a $500 maintenance fee, making your investment $261.30 ($500 – $238.70).  If AMZN closes at any price above $3165 on September 11, both options would expire worthless, and your return on the spread would be 91% (1038% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates August 8, 2020

IBD Underlying Updates August 8, 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

Should You Buy the Dip in Adobe (ADBE)?

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 buy the dip

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

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

Visa (V) Regains Momentum Following Earnings Report

Monday, October 28th, 2019

Visa’s earnings report in the past week has boosted sentiment among analysts. The following two articles include two upward price target revisions and a case for why the stock can continue to strengthen from here – Visa Analysts Encouraged By Q4 Results, 2020 Guidance and Visa stock gains after forecast paints a picture of continued strength in 2020.

The rally that followed the earnings report has lifted Visa’s stock back above all of the commonly looked at moving averages (20, 50 & 100-day). What’s appealing about V is the long-term trend and that dips have been shallow over the year which points to strong demand. There was a correction lower since early September, but the post-earnings upward momentum suggests the stock may have resumed within its broader uptrend.

Visa Chart October 2019 vertical options spread

Visa Chart October 2019

If you agree there’s further upside ahead for V, 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 V 29NOV19 175 Puts (V191129P175)
Sell To Open V 29NOV19 177.5 Puts (V191129P177.5) for a credit of $0.99 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when V was trading near $178.  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 $97.05 and your broker would charge a $250 maintenance fee, making your investment $152.30 ($250 – $97.05).  If V closes at any price above $177.5 on November 29, both options would expire worthless, and your return on the spread would be 63% (730% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 26, 2019

IBD Underlying Updates October 26, 2019

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

Synchrony Financial (SYF) Gets a Boost From its Latest Earnings Report

Monday, October 21st, 2019

Synchrony Financial rallied to a two-month high in the past week and several analysts think it can continue higher. Here is what the IBD had to say about the stock – This GE Spinoff Nears Buy Point On Strong Earnings. Also take a look at the following article which discusses Warren Buffett’s stake in the company – Here is What Hedge Funds Think About Synchrony Financial (SYF).

SYF recently regained both its 50 and 100 day moving averages which signals the broader bullish trend has potentially restarted. Of the two, the 100-day moving average was particularly strong resistance throughout September. For this reason, the indicator is now seen as strong support on near-term dips. The break above the 100-day moving average also means a break above the September high which in turn has set a successions of higher highs and higher lows. Another way to look at it is as a range breakout since the stock was essentially consolidating sideways above its 200-week moving average for the past two months or so.

SYF Chart October 2019 vertical options spread

SYF Chart October 2019

If you agree there’s further upside ahead for SYF, 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 SYF 22NOV19 31.5 Puts (SYF191122P31.5)
Sell To Open SYF 22NOV19 34.5 Puts (SYF191122P34.5) for a credit of $0.93 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when SYF was trading near $34.50.  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 $91.70 and your broker would charge a $300 maintenance fee, making your investment $208.30 ($300 – $91.70).  If SYF closes at any price above $34.50 on November 22, both options would expire worthless, and your return on the spread would be 44% (502% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 19, 2019

IBD Underlying Updates October 19, 2019

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

Lululemon Athletica Nears Major Technical Support Area

Monday, September 30th, 2019

Lululemon Athletica’s reported earnings in early September which led to a rally to fresh all-time highs. Several analysts are expecting more upside, here are two of them – Is Lululemon (LULU) a Solid Growth Stock? 3 Reasons to Think ” Yes “ and UBS Group Analysts Give Lululemon Athletica (NASDAQ:LULU) a $210.00 Price Target.

After hitting all-time highs, LULU has edged lower to pare gains related to the earnings report. A confluence of support is in sight and considered quite strong. The confluence consists of the 50-Day moving average, a horizontal level, and the lower bound of a long-term bullish trend channel. The horizontal level comes in at $188 and previously acted as resistance on several rallies since June. The trend channel dates back to a low printed in late December and has contained price action since.

LULU Chart September 2019 vertical earnings spread

LULU Chart September 2019

If you agree there’s further upside ahead for LULU, 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 LULU 01NOV19 187.5 Puts (LULU191101P187.5)
Sell To Open LULU 01NOV19 190 Puts (LULU191101P190) for a credit of $1.10 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when LULU was trading near $190.  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 $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $107.50 and your broker would charge a $250 maintenance fee, making your investment $142.50 ($250 – $107.50).  If LULU closes at any price above $190 on November 1, 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 September 28, 2019

IBD Underlying Updates September 28, 2019

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

CDW Corp. (CDW) Is Poised to Break to Fresh Record Highs

Monday, September 9th, 2019

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.

CDW Corp. (CDW) Is Poised to Break to Fresh Record Highs

Several Analysts are optimistic about CDW’s outlook, take a look at what there two publications have to say – Is CDW (CDW) Outperforming Other Computer and Technology Stocks This Year? And With EPS Growth And More, CDW (NASDAQ:CDW) Is Interesting.

The most impressive part of CDW is how steadily it has been rising throughout the year. Dips in the stocks price are shallow and appear to be quickly bought up. A rising trend channel has encompassed price action and there are several layers of downside support. The first is a horizontal level that comes in just above $116. Further support comes from the 50-day moving average, currently near $113.50. The moving average is near the bottom of the trend channel and therefore is considering to be major support.

CDW Chart September 2019 verticle options spread

CDW Chart September 2019

If you agree there’s further upside ahead for CDW, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.

Buy To Open CDW 18OCT19 110 Puts (CDW191018P110)
Sell To Open CDW 18OCT19 115 Puts (CDW191018P115) for a credit of $1.18 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when CDW was trading near $118.  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 $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $115.50 and your broker would charge a $500 maintenance fee, making your investment $384.50 ($500 – $115.50).  If CDW closes at any price above $115 on October 18, both options would expire worthless, and your return on the spread would be 30% (281% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates September 5, 2019 weekly trade idea

IBD Underlying Updates September 5, 2019

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

PayPal (PYPL) Dips Following Earnings, What’s Next?

Monday, July 29th, 2019

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.

Terry

PayPal (PYPL) Dips Following Earnings, What’s Next?

PayPal slipped lower after reporting earnings in the past week. Take a look at what these analysts are saying about the stock post-earnings – PayPal Q2 Earnings Beat Estimates, Revenues Up Y/Y and PayPal’s Earnings May Have Disappointed but Its Chart is “BTF”.

Paypal dipped to the 50-day moving average on Thursday and held above the moving average on Friday. The stock trades at a confluence of support as there is also a horizontal level in play. The level comes in at $113.70 and acted as both resistance and support in the past. In the event the stock falls to hold here, there is further support from the 100-day moving average close to around $112.

PYPL Chart July 2019 vertical options spread after earnings announcement

PYPL Chart July 2019

If you agree there’s further upside ahead for PYPL, 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 PYPL 30AUG19 112 Puts (PYPL190830P112)
Sell To Open PYPL 30AUG19 115 Puts (PYPL190830P115) for a credit of $1.45 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PYPL was trading near $115.  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 $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $142.50 and your broker would charge a $300 maintenance fee, making your investment $157.50 ($300 – $142.50).  If PYPL closes at any price above $115 on August 30, both options would expire worthless, and your return on the spread would be 90% (1027% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates July 25, 2019 weekly trade ideas

IBD Underlying Updates July 25, 2019

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

Can PayPal (PYPL) Continue It’s Earnings-Driven Momentum?

Sunday, October 28th, 2018

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.

Last week was an awful one for the market.  SPY fell 4% after whip-sawing both up and down all week.  Most option portfolios probably suffered as well.  We were delighted that our newest portfolio which trades options on MSFT notched a gain of 20.4% for this otherwise bad week for the market.  Chalk up another victory for well-executed option strategies.

Terry

Can PayPal (PYPL) Continue It’s Earnings-Driven Momentum?

PayPal received a recent boost from it’s earnings report and these Seeking Alpha articles suggest it can continue the upside momentum – PayPal: It’s A Buy and It’s Not Too Late To Buy PayPal.

Payal appears to be supported near the $83 price point which was where the stock gapped up to following their earnings report earlier this month.  The 20 and 50-day moving averages are converging in this area as well to offer further technical support.  In the event of a dip lower, further support near the psychological $80 handle is likely to trigger strong buying as technical traders often look to position following a gap close.

PYPL Chart October 2018

PYPL Chart October 2018

*source Tradingview.com

If you agree there’s further upside ahead for PYPL, 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 PYPL 30NOV18 80 Puts (PYPL181130P80)
Sell To Open PYPL 30NOV18 83 Puts (PYPL181130P83) for a credit of $1.06 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PYPL was trading near $83.  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 $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $103.50 and your broker would charge a $300 maintenance fee, making your investment $196.50 ($300 – $103.50).  If PYPL closes at any price above $83 on November 30, both options would expire worthless, and your return on the spread would be 53% (605% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 25, 2018

IBD Underlying Updates October 25, 2018

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

Has The Tide Turned in Paycom Software (PAYC)?

Saturday, June 16th, 2018

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.

Terry

Has The Tide Turned in Paycom Software (PAYC)?

Investor’s Business Daily, the website belonging to the creators of the IBD Top 50 list, named PAYC their IBD Stock of the Day on Friday.  Take a look at the article here for the reason behind the choice.  As well, an article published on The Motley Fool explains why Paycom Software is one of three stocks the analyst just added to his retirement portfolio.

After consolidating lower within a correction for about a month or so, PAYC has turned decisively higher, crossing above an important barrier.  Two prior attempts since May at the horizontal resistance level near $110 resulted in a notable correction, however, the stock managed to climb above it last week to signal that bulls may be retaking control.  The level has been significant since April, acting as both support and resistance.  In addition to the horizontal level, the stock has comfortably regained its 20-day moving average and trades near 52-week highs.

PAYC Chart June 2018

PAYC Chart June 2018

*source Tradingview.com

If you agree there’s further upside ahead for PAYC, 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 PAYC 20JUL18 105 Puts (PAYC180720P105)
Sell To Open PAYC 20JUL18 110 Puts (PAYC180720P110) for a credit of $1.33 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PAYC was trading near $112.  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 $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $130.50 and your broker would charge a $500 maintenance fee, making your investment $369.50 ($500 – $130.50).  If PAYC closes at any price above $110 on July 20, both options would expire worthless, and your return on the spread would be 35% (399% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates June 14, 2018

IBD Underlying Updates June 14, 2018

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

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I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

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