FaceBook: Have you missed it ?!

27 paź 2016

FUNDAMENTALLY COMPELLING
Quality company (5yr revenue growth +55%, long-term EPS +35%)
Trading at a premium valuation (63x PE, 8.5x P/BV)
Positively biased consensus with +19% upside target
Happy to own the stock for the long term, but at what price?

TECHNICALLY STRONG
Superb up-channel post July 2013 breakout
Up-trend accentuation post Aug'15 flash crash
Technical picture positive on most time frames (M, W, D)
Has been registering higher highs and lows
Stock looking overbought on the longer time frames

WATCH THE FOLLOWING LEVELS PRE/POST EARNINGS
Watch long entry points at 128/123.50/117

OR: NEAR 0-COST OPTIONS STRATEGY
BUY 1xNov4'16 $135 call = $-2.07/share
SELL 2xNov4'16 $122 put = 0.99/share
TOTAL Pay 0.09/share to benefit from the upside
WORST case scenario: Go long -7% below current price

3 lis 2016

Zlecenie aktywne

Great numbers but cautious guidance on future growth momentum took a toll on the stock post-market, it seems. We should be exercised on the puts. Great news if the stock holds its up-channel above 118 (channel bottom and MA200 support). Bad news if it breaks it sustainably. I will update this trade/idea during market hours.

3 lis 2016

Zlecenie aktywne

FB still comfortably within the long term up-channel, and some 2.75% away from its bottom. The consolidation has taken the stock very near our $122 put strike.

At the current level, we might not be put on the options (too close to the money), in which case, we would be losing a meager 0.09/share.

If exercised nonetheless, I would keep the shares, targeting both a short-term rebound and a longer term move towards the upper part of the channel.

8 lis 2016

Transakcja zamknięta: osiągnięto wyznaczony cel

Call expired worthless. Puts assumed to be exercised. This trade is now closed with a total cost of 0.09/share (0.07% of stock price at trade inception). Picking up this idea in a new thread ("Playing up-channel rebound") which assumes a long position in FB at 122/share.