BABA - Triple-topping: What to do with the upcoming earnings?
BABA’s exceptional run seems to be triple-topping. While the long-term trend remains up, the short and mid-term pictures look like they have turned to the downside. The company should announce earnings on Feb 1 before market open and I would wait for this catalyst to go long, just in case any fundamental disappointment should take us lower to confirm the poor, current technical picture. In line with the strategy I proposed on NFLX (see below), the game consists in buying synthetic upside exposure ahead of earnings . If the stock breaks out, you will be exposed to the upside. If the stock remains range-bound, you will lose a small premium. If the stock disappoints and tanks, you could decide to lose your premium or to sell a put to make your lost premium up.
1. BUY BABA Feb 16'18 $182.5 CALL = $6.90 (3.78%)
OR
2. BUY BABA Feb 16'18 $192.5 CALL = $3.32 (1.82%)
1. BUY BABA Feb 16'18 $182.5 CALL = $6.90 (3.78%)
OR
2. BUY BABA Feb 16'18 $192.5 CALL = $3.32 (1.82%)
Comment:
In my previous post, please read the following:
2. Feb 16'18 $192.5 CALL = $7.57 --> +128%
instead of what I wrote which was incorrect.
Thank you.
2. Feb 16'18 $192.5 CALL = $7.57 --> +128%
instead of what I wrote which was incorrect.
Thank you.
1. Feb 16'18 $182.5 CALL = $13.42 --> +94.5%
2. Feb 16'18 $192.5 CALL = $3.32 --> +128%
Keep holding the calls into earnings, if you have purchased them.