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Microsoft - MSFT Earnings and a way to fade.
1 min read

Microsoft - MSFT Earnings and a way to fade.

Microsoft - MSFT Earnings and a way to fade.

Overview

Microsoft - MSFT  reports its fiscal Quarter ending Mar 2020 after the bell today. The consensus EPS forecast for the quarter is $1.27.

The Set-up

MSFT stock was ~$190 in late January, hit a low of ~$135 in March and has now rallied back to ~$176. It is nearly 4% higher today with the market.

Ways to Play

MSFT has been fairly strong into the print but as we've seen in a lot of recent earnings stocks are moving with the broader market and options expected moves need to account for that, not just individual events.

Here's a bearish target into earnings highlighting one interesting way to fade the move using OptionsAI technology:

Here's a look at the chart on the credit call spread. What's interesting about this is the breakeven on the trade (~$182) lines up with the recent high in the stock. It's essentially fading the move higher with a loss above the recent high and profits below. It's max profit is any close below $177.50 on May 15th:

That's just one way to skin the cat, but selling a credit call spread is a good alternative to those bearish, as it's simply "not bullish".

Give OptionsAI technology a try with your own price target in AAPL HERE

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