4ADBE trade ideas
ADBE analysisADBE is consolidating from reaching it's high after it's last earning's report. Waiting for it to drop more and break out of consolidation.
Strong support @ $170Fundamentally this is a sound company and its stocks should be held throughout 2018. Ready to buy any dip around support level.
Adobe's retrace ?The markets didn't like the report. What's the worse which can happen? Here I plotted a possible scenario.
Price has memory.
Sep 20 Earnings: Adobe's Competition and Expenses are burning.Adobe is a wonderful company with a great array of products and services. The company has been gaining traction with its cloud offerings allowing for the conversion of enterprise customers to Enterprise Term License Agreements (ETLAs), resulting in higher Creative Cloud adoption.
However, with great power comes great responsibility, and Adobe's expenses have been on the move with its foray into AI and Virtual Reality.
A pullback on behalf of higher expenses and guidance becoming slightly more conservative over the longer run is warranted.
I believe the stock's price is not currently pricing in the company's competition and expenses.
A short term sell with a $145 to $140 PT for the next 2-3 months.
ADBE breakoutLots of nice breakouts on strong stocks today. Let's home the political scene stays healthy.
5.25.2017 Trade Idea: ADBEIf you are interested in more of our trades, check out our profile and Tradingview Indicator @ChaoticTrader
Adobe Trend Reversal or Buy Opportunity?
Adobe (ADBE) exploded upwards on Friday, March 16th after reporting their earnings. At the same time, a huge reversal bar formed on the daily chart with the close at $126.94. The following trading day’s bar closed just below the low confirming a possible reversal of a pretty massive uptrend the stock has been under over the last months. Not to mention, Adobe and Microsoft (MSFT) have announced a joint venture in customer engagement and marketing, as well as an Adobe announcements of new cloud services. The cloud services could become a new commercial source of revenue, especially with Adobe’s niche in the creative marketplace as opposed to cloud service providers like Amazon’s (AMZN) AWS.
But is it time to go short and sell? Well, for now, yes, or with less capital risk, fade the reversal. Fundamentals for the company are strong, with growth showing in the long term. But our strategy is a swing strategy to take advantage of lower risk opportunities. This trade with a stop loss above the high of the reversal bar at $130.30 is definitely not the lowest risk of them all, but a credit spread might suffice before a high potential for bullish continuation in the long run.
If you’re an options player like myself or a straight underlying trader, then here’s a few sets of trades depending on your investment style.
1) Short the stock
Entry: any price today
Stop: $130.31 on market close
Trail it after two more days of closing bars until breakeven. If the trend has started in the downward direction, trail it to our middle moving average and follow it until the bulls take over
2) Credit Spread
Sell X Call, 21 Apr 17 Exp, 130 Strike
Buy X Call, 21 Apr 17 Exp, 135 Strike
Max Profit: ~13% Return on Risk/Investment
3) Stay on the sidelines, and wait for a buy signal fractal for medium/longer term trade
Buy X Amount of Calls, 20 Oct 17 Exp, 115 Strike
Again, from a technical standpoint, we currently rate Adobe (ADBE) a Sell in the short term, but the bullish uptrend has a high likelihood of continuing in the medium to longer term due to the fundamental outlook and growth opportunities for the company.
Until our next article.
ADBEAdobe is making a new high breaking a previous congestion zone. A new signal for going long again.
