Trade Alert: Post-Earnings

With Tesla's move today, three of our open trades are on track for 200% gains. Let's go for a fourth.

Three Trades On Track For 200% Gains

As we mentioned in our Exits post on Saturday, two of our open trades were on track for 200% gains, one on SalesForce (CRM 0.00%↑), and one on Carvana (CVNA 0.00%↑).

With today’s move in Tesla (TSLA 0.00%↑) shares, we now have three trades on track for 200% gains. The max gain (of about 207%) for our Tesla trade in the post below is with Tesla trading over $205; Tesla is trading at about $229 as I type this.

Another Post-Earnings Trade

Today’s trade is another post-earnings trade. Like SalesForce, this is a stock that dropped post-earnings, but unlike SalesForce, this one beat on both earnings as well as revenues. Like SalesForce, this growth tech stock now has a Chartmill Valuation Rating of 6 (on a scale from 0 to 10). Some other ratings it currently has:

• Profitably: 8

• Health: 7

• Growth: 7

• Technical: 10

• Piotroski F-Score (on a scale of 0 to 9): 8

I placed a limit order on this one a couple of weeks ago, and it just filled today. This is a bet that the stock will climb about 3% from here over the next few weeks. If it does, we’ll be able to exit for about a 200% gain.

Details below.

Today’s Trade

The company is Meta Platforms (META 0.00%↑), and the trade is a vertical spread expiring on July 26th, buying the $515 strike calls and selling the $520 strike calls, for a net debit of $1.66. This trade filled at $1.66. Note: when I placed this trade, the expected date for META’s earnings release must have been July 26th; now it’s July 31st, so you may want to use the August 2nd expirations for this one. I would, if I were entering it now.

Exiting This Trade

I’m going to open a GTC order to exit this one at about $4.50, and lower that price, if necessary, as we approach expiration.