Subject: 2017 Results and Adobe Systems (ADBE): Q4 Earnings Beat to Fuel Further Momentum

 

Terrys Tips newsletter
     

Dear Friend,

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our portfolios to spot outperforming stocks and place spreads that take advantage of the momentum. Speaking of our portfolios, I would like to share with you the exact report for 2017 that we sent to Terry’s Tips’ paying subscribers this week – “All of the portfolios except Boomers’ Revenge and Vista Valley have been reset for 2018. Boomers’ Revenge will start over with $5000 after the 1/19/18 spreads expire with an almost-certain gain of 56% for the “year” starting and ending on the third Friday of January.  The others:

Capstone Cascade – (restarted with $10,000 on 1/2/18) – 48% gain for 2017 

Contango (our only portfolio not available for Auto-Trade – restarted with $5000 on 1/2/18) – 138% gain for 2017 

Earnings Eagle (started with $5000 on 6/7/17) – 31% gain over last 6 months of 2017 

Galloping Turtle (restarted with new strategy on 11/20/17 after withdrawal of $3960) –  79% gain for 2017 

Honey Badger (restarted with $5000 using a new strategy on 12/26/17) – 48% loss for 2017, our only losing portfolio (fully recovered loss in the first week of 2018)

Leaping Leopard (restarted on 12/26/17 with $5000 after withdrawal of $2001) – 40% gain for 2017 

Rising Tide (restarted on 1/2/18 with $5000 after withdrawal of $7615) – 152% gain for 2017 

Vista Valley (restarted on 1/19/18 with $5000 after withdrawal of $5058) – 101% gain for 2017 

Wiley Wolf (restarted on 11/8/17 with $5000 after $19,840 withdrawal) – 728% gain for 2017 as FB soared 56%.”

Terry

 
Option Tip of the Week

Adobe Systems (ADBE): Q4 Earnings Beat to Fuel Further Momentum

Two recent analyst upgrades suggest there is potential for a 10% upside in Adobe Systems stock price as BMO Capital Markets have recently raised their price targets to $205 and BofA have set a target of $220.

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Technicals

The technical outlook for ADBE is encouraging.  The stock posted a steady rally throughout 2017 for an annual gain of roughly 70%.  ADBE corrected lower in late November but bounced back after a test of horizontal support at 165.50 from a prior gap.  It has since recovered back above the 50-period daily moving average and is on the verge of breaking to new highs, suggesting the uptrend has resumed.

 ABDE Graph January 2018

*source Tradingview.com

If you agree there's further upside ahead for Adobe Systems, consider this trade which is a bet that the stock will continue to advance, or at least not decline very much over the next six weeks.

Buy To Open ADBE 16Feb18 180 Puts (ADBE180216P180)

Sell To Open ADBE 16Feb18 185 Puts (ADBE180216P185) for a credit of $1.85 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when ADBE was trading near $185.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

If you use our favorite broker for this trade, tastyworks, your commission on this trade will only be $1 per opening contract ($2 per spread) (and there is no commission on closing trades, only the $.10 clearing fee).  Each contract would then yield $183 and your broker would charge a $500 maintenance fee, making your investment $317 ($500 – $183).  If ADBE closes at any price above $185 on February 18, both options would expire worthless, and your return on the spread would be 58% (540% annualized).

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Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates January 4, 2018

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

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Any questions?   I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts. seth@terrystips.com

You can see every trade made in the actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here.   Why wait any longer to make this important investment in yourself?

I look forward to having you on board, and to prospering with you.

Terry
 

 


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Testimonial of the Week

Before rejoining Terry's Tips three months ago I struggled to keep my head above water, even attempting to use the 10K strategy. Now when I look at our portfolio I think of the line from "Butch Cassidy and the Sundance Kid", "who are these guys!". Your performance is nothing less than remarkable and indicates a deep commitment of time and energy to make this happen. Yours is a rare accomplishment for a newsletter to help the small investor, the "little guy", achieve success in the incredibly difficult world of investing. You should feel very proud. Thank you! ~ Neal

     

Thank you again for being a part of the Terry's Tips newsletter. If you are interested in signing up as an Insider, visit Terry's Tips today for details.

Sincerely,
Dr. Terry Allen
Terry's Tips

 
 
Week 468

January 8, 2018
 
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