0JPH trade ideas
EARNINGS: JNPR, GRPN, AND TWTR (DIRECTIONAL PLAYS)A couple of other ideas for next week surrounding earnings ... . I like to have a lot of these ideas in the hopper so that I can price setups during regular market hours; some of these aren't as "sexy"/liquid during NY as they appear in off hours.
JNPR Dec 2nd 21 short puts; .45 cr at the mid (strike around long-term support). Earnings (10/25). I generally do these earnings plays with a short strangle or iron condor, but just can't get squat out of one of these strats in JNPR, so might as go directional.
TWTR Dec 16th 15 short puts; .60 at the mid (I'm more fixated on the 14 strike, since it's around long-term support). If I get a dip post earnings (10/27) that "juices up" the 14, I'll pull the trigger on that. Roll, roll, roll until a buyout rumor or until a buyout actually occurs. If it pops higher, I shrug my shoulders and say, "You doofus. You waited too long." TWTR has good metrics for my standard short strangle or iron condor, but I'm fixated on going directional here with the repetitively resurfacing buy out rumors which may, at some point in time, result in an actual buy out ... .
GRPN: Dec 16th 4.5 short puts: .31 at the mid. Earnings 10/26. That shortie is quite close into current price in the scheme of things, so this one would be a crap shoot. Either it takes off to the upside or look forward to getting put the stock at 4.5 (minus the credit you received on the front end). The good thing is that background IV is always fairly high, which would help with selling calls against.
JNPR- Short at the break of 22.37 JNPR is breaking down from an upward channel. It is looking a good short as It declined below all the EMA lines, and moneyflow is in the negative side.
On the option side we are looking for $22 January puts
You can check our detailed analysis on JNPR in the trading room/ Executive summary link here-
www.youtube.com
Time Span: 4:20"
Trade Status: Pending
JNPR Downgraded today, The Trade was yesterdayYesterday I took a day trade off a day trading cloud breakout strategy on JNPR. When price closed below the cloud and setup a pivot I set an alert for a break of that pivot low to trigger a breakout short strategy. Since jumping into options when price is moving is a recipe for getting terrible fills I have to wait for a pullback. The pullback comes when price comes up to confirm the prior pivot low as new resistance. Combine that with an Ichimoku level at that level and moment and it creates a high probability setup with well defined risk.
I took August 22 Puts because I wanted to avoid the theta hit of July's and chose a strike that would get me ITM at around 3:1 Reward/Risk. I had no idea the downgrade would come but it gapped price well ITM and I took profit.
Wider Market Outlook
My eye is on the technology sector this month. Seasonally it is set to move one way or another and so far during the first few days of the quarter the best trades have been bearish in this sector. Money flowing out to technology while simultaneously moving to "safety" plays suggests traders are getting risk averse.
Adding to my "Speculative Watch list" Well I've had my eye on this for a couple weeks now, and will be looking to enter short through options to limit my risk and increase the leverage of the position. This weeks candle closed as a pinbar / bullish hammer showing that we might have a pullback to retest resistance around the $27.00 / $28.00 area. If we get a pullback I will be waiting for bearish price action to enter short.
The contracts I have my eye on are the OCT15 20 Puts currently the ask is at .17 p/contract. So if I enter it could be around .15 - .10 p/contract. If I do buy the puts I'll be looking to buy +100 contracts. Risk being around $1,200 - $1,700. With profits ranging between $13,000 - $43,222.06 So now you can definitely tell why I'm more than willing to take this trade.
Risk held in this trade:
Price action risk (Break above $28.00)
Expiration ( Contracts losing value, and incurring a loss being the premium payed for contracts.)
Option contracts time decay
If entered I may cancel the trade at a loss if price breaks above resistance at the $28.00 area, or I may simply decide to hold the options till expiration and take the full loss of premium payed.
Green lines represent management / take profit areas, another management area not highlighted is the $22.00 area.
Price / Earnings Estimate Momentum / Contracting P/E Ratios I'm going to copy and paste a rough article by Barron's on the company. I've done further research on the company and I like what I see, and makes sense with the technical entries I'm looking for also.
Barrons
Juniper Networks ( JNPR ), up 20% this year, sells telecom equipment. It’s in the early stages of a cyclical rebound after a pullback in spending a year ago, according to investment bank UBS, which views the company as a takeover candidate for bigger equipment players like Ericsson. After a beat-and-raise quarterly report last month, shares fetch 15 times forward earnings.
Now to the technical entry I'm looking for a pull back to the highlighted area around 26.20/.60 to go long upon confirmation of demand for the stock in that area. Why do I think it can pull back still, because of the daily candlestick bearish pinbars that have formed at the $27 level. Long targets are at the 1.27 & 1.618 Fibonacci extensions. Keepin' it nice and simple. hehe
Cheers, and happy trading =)
