CSIQ and JOYG Earnings Next Week
Add Two Strangle Plays Now
PLAY: Buy the CSIQ March 20 Calls (O:CSIQ 10C20.00) and the CSIQ March 19 Puts (O:CSIQ 10O19.00) at market, good for the day. The total cost should be around $2.30. Do not place a sniper sell or stop loss at this time.
PLAY: Buy the JOYG March 50 Calls (JOYG 10C50.00) and the JOYG March 49 Puts (JOYG 10O49.00) at market, good for the day. The total cost should be around $4.40. Do not place a sniper sell or stop loss at this time.
Dear Bottarelli Research Member,
It looks like today will be one of those nondescript, sideways grinds. As you can see from the Dow chart below, the Blue Chips are still trading below their 50-day moving average. From a technical perspective, this still indicates that we should be cognizant of the market’s downside potential. See for yourself:
But, as you witnessed from yesterday’s surprising end-of-day bounce, we must also carry upside positions as well. After all, the first two months of 2010 have seen extremely choppy trading conditions without any form of sustainable trends in either direction. Therefore, we must continue taking what the market gives us. From a strategic standpoint, that means we continue to carry upside and downside positions, and quickly lock in gains when these plays move in our direction. Quite frankly, until we can get some sustainable momentum in either direction, this is the only way to consistently make money right now.
On days like this, where we’re not seeing much movement on any of our positions, it’s best to sit tight – which is what we’ll do today. Unless we see a big move on any of our plays, we’ll most likely hold our ground going into next week.
While we have a moment, I’d like to get positioned in two new earnings plays that are lined up for next Wednesday.
The first comes from Canadian Solar (CSIQ – NASDAQ), who is expected to report earnings of $0.48 before the market opens.
The second comes from Joy Global (JOYG – NASDAQ), who is expected to report earnings of $0.64 before the market opens.
What I like is the fact that both stocks have the ability to make big earnings moves, combined with the proper strike price skew on their options. From a chart perspective, both stocks have voids on either direction. This is certainly what we want to see going into an earnings report.
As you’ll see, the JOYG play is more expensive to initiate than the CSIQ play, but both still offer strong profit potential. Therefore, while the market action remains muted here on the last trading day of February, let’s quietly enter into both plays and get positioned for a run going into next Wednesday’s earnings. Here are the plays…
PLAY: Buy the CSIQ March 20 Calls (O:CSIQ 10C20.00) and the CSIQ March 19 Puts (O:CSIQ 10O19.00) at market, good for the day. The total cost should be around $2.30. Do not place a sniper sell or stop loss at this time.
PLAY: Buy the JOYG March 50 Calls (JOYG 10C50.00) and the JOYG March 49 Puts (JOYG 10O49.00) at market, good for the day. The total cost should be around $4.40. Do not place a sniper sell or stop loss at this time.
And as always…
Lock and load!
Sincerely,
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