Microsoft after earnings, shall we go short?

26 Apr 2019

The price broke both the 2DS and 3DS Bollinger bands, is this area (after 3DS) the price stays for less than 2% of the time. This may suggest that the price could tend to come back to the median (121$ at the moment) and "release some stress". The RSI is also over 80, well inside the overbought zone, which also indicates a possible reversal of the trend. The title is at an all time high, changes are that we could see a retracement. Strategy for STOCK TRADERS For these reasons, I would suggest selling the stock with a Stop Loss @ 130-135 (depending on your risk appetite) and a TP @ 115, level of support - resistance in previous trading sessions (Having the 135-115 would give you a 2.22 R/R). Strategy for OPTION TRADERS If you are an option seller, I would sell a 135 Call. If you want to cover it, buy a 140-145 Call. If you want to make a short strangle, do the sell 135 Call and sell 115 Put. If you want to make an short Iron Condor; do 135-140 and 115-110.