Obviously, there is much at stake for Apple (AAPL) today.
Well, at least if you are worried about where the stock price will be tomorrow since the earnings report today is unlikely to radically change the path of the company or its products. I have to say I'm not sure I am going to have any sort of position into AAPL for the earnings today. The diagonal spreads worked just fine for Netflix (NFLX), although given what the stock did, I'd have to say the return is somewhat disappointing in comparison. I'm just not sure I'm seeing AAPL well here. On the surface, everyone I talk to absolutely expects this stock to pop regardless of what they say. There is certainly more call buying going on today, about 2-1 vs. puts, but I haven't been able to convince myself the obvious trade is the right trade.
We've now see the S&P 500 rally more than 20 handles off the lows of the early morning and I mean very early (right around 5 a.m. ET). While I do have issues hunting for new longs up here, there are a few which come to the surface for me.
The more aggressive of the two is Monster Beverage (MNST). It's tempting to chase right here, but I want to see a close over $57. The stock reports earnings May 10, so I can look at buying May at-the-money or even slightly-out-of-the-money calls without as much fear from time decay as I anticipate the implied volatility will ramp as we run into earnings. This $57 area is a double top, but a breakout here could push the stock to $65 quickly. If MNST pushes back over $57 intraday, I will take a half position and fill the position right before the bell if the stock maintains its $57 level.
Monster Beverage (MNST)
Source: StockCharts.com
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A similar pattern emerged yesterday in Dean Foods (DF) last night, which triggered a buy for me this morning at $19.13. This is a multiday swing position here, so I wouldn't fret between $19 or $19.20 on the entry. There is a nice double top breakout here along with the inverse head-and-shoulders pattern, which put a $20.50 target on this name. My stop here is on a two-day close under $18. The TRIX and stochastics are leading the price breakout with the RSI confirming the current price pattern. Earnings are due May 6, so if I still hold the stock then I will have to consider adjusting or hedging the position.
Dean Foods (DF)
Source: StockCharts.com
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At the time of publication, the author was long MNST, DF, NFLX diagonal spreads.