Motorola Solutions (NYSE: MSI) recently reported strong Q1 2025 earnings on May 1, beating both revenue and EPS expectations. Despite the solid numbers, the stock has shown technical weakness, dropping sharply after earnings. This divergence between fundamental strength and technical bearishness creates a strategic window for both bullish and bearish options traders.
1. Technical Analysis
Pattern Recognition
After stripping away external annotations, the raw chart reveals:
• Double Top Formation near the $439 area — a classic bearish reversal signal.
• Sharp Breakdown post-top with significant volume.
• Bear Flag forming — a potential continuation pattern that often precedes another leg down.
Price Action
• Current Price: ~$412
• Short-Term Trend: Bearish
• Volume: Elevated during breakdown — confirms sellers in control
• No Bullish Reversal Yet: Price hasn’t reclaimed any major resistance zones
3. Options Strategies (1-Month Outlook)
Bearish Strategy: Put Option Play
Rationale: The breakdown from a double top and potential bear flag indicate more downside is possible.
• Strategy: Buy 1x MSI $410 Put
• Expiration: June 21, 2025
• Premium (Est.): $8.85
• Breakeven: ~$401.15
• Risk: Limited to premium paid
• Reward Potential: High if price breaks below $410 and continues to $400 or lower
Best for: Traders who believe technical pressure will outweigh strong fundamentals in the short term.
Bullish Strategy: Call Option Play
Rationale: Despite technical weakness, the fundamentals remain solid. Earnings beat, record cash flow, and software expansion could support a rebound—especially if macro fears ease.
• Strategy: Buy 1x MSI $420 Call
• Expiration: June 21, 2025
• Premium (Est.): $1.54
• Breakeven: ~$421.54
• Risk: Low cost, limited to $1.54 per share
• Reward Potential: High if price breaks and holds above $420
Best for: Traders who expect a bounce based on fundamental strength or oversold conditions.
4. Final Recommendation: Watch for Confirmation
Given the mixed signals:
• Short-term trend is bearish, but fundamentals are strong.
• Look for confirmation:
• If price breaks below $408, consider the put strategy.
• If price reclaims and holds above $420 with volume, the call play becomes more attractive.
5. Risk Management Tips
• Set stop-losses or alerts at key price levels ($408 and $420).
• Don’t overleverage — especially with options.
• Monitor upcoming macroeconomic headlines (inflation, tariffs, Fed decisions).
1. Technical Analysis
Pattern Recognition
After stripping away external annotations, the raw chart reveals:
• Double Top Formation near the $439 area — a classic bearish reversal signal.
• Sharp Breakdown post-top with significant volume.
• Bear Flag forming — a potential continuation pattern that often precedes another leg down.
Price Action
• Current Price: ~$412
• Short-Term Trend: Bearish
• Volume: Elevated during breakdown — confirms sellers in control
• No Bullish Reversal Yet: Price hasn’t reclaimed any major resistance zones
3. Options Strategies (1-Month Outlook)
Bearish Strategy: Put Option Play
Rationale: The breakdown from a double top and potential bear flag indicate more downside is possible.
• Strategy: Buy 1x MSI $410 Put
• Expiration: June 21, 2025
• Premium (Est.): $8.85
• Breakeven: ~$401.15
• Risk: Limited to premium paid
• Reward Potential: High if price breaks below $410 and continues to $400 or lower
Best for: Traders who believe technical pressure will outweigh strong fundamentals in the short term.
Bullish Strategy: Call Option Play
Rationale: Despite technical weakness, the fundamentals remain solid. Earnings beat, record cash flow, and software expansion could support a rebound—especially if macro fears ease.
• Strategy: Buy 1x MSI $420 Call
• Expiration: June 21, 2025
• Premium (Est.): $1.54
• Breakeven: ~$421.54
• Risk: Low cost, limited to $1.54 per share
• Reward Potential: High if price breaks and holds above $420
Best for: Traders who expect a bounce based on fundamental strength or oversold conditions.
4. Final Recommendation: Watch for Confirmation
Given the mixed signals:
• Short-term trend is bearish, but fundamentals are strong.
• Look for confirmation:
• If price breaks below $408, consider the put strategy.
• If price reclaims and holds above $420 with volume, the call play becomes more attractive.
5. Risk Management Tips
• Set stop-losses or alerts at key price levels ($408 and $420).
• Don’t overleverage — especially with options.
• Monitor upcoming macroeconomic headlines (inflation, tariffs, Fed decisions).
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.