Can Five Below (FIVE) Maintain The Earnings Inspired Momentum?
Can Five Below (FIVE) Maintain The Earnings Inspired Momentum?
Several analysts are expecting further upside for FIVE, here are two of them – Five Below (FIVE) PT Raised to $145 and Five Below (FIVE) PT Raised to $135 at Buckingham Research.
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Technicals
FIVE broke higher following their earnings report in the past week, scaling above the 50-day moving average. The indicator is now seen as support and carries some confluence as a horizontal level at $121 as well as a rising trendline originating from December lows are within close proximity.
*source Tradingview.com
If you agree there's further upside ahead for FIVE, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.
Buy To Open FIVE 3MAY19 121 Puts (FIVE19053P121)
Sell To Open FIVE 3MAY19 124 Puts (FIVE19053P124) for a credit of $1.15 (selling a vertical)
This price was $0.02 less than the mid-point of the option spread when FIVE was trading near $124. Unless the stock rallies quickly from here, you should be able to get close to this amount.
Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers). Each contract would then yield $112.50 and your broker would charge a $300 maintenance fee, making your investment $187.50 ($300 – $112.50). If FIVE closes at any price above $124 on May 3, both options would expire worthless, and your return on the spread would be 60% (684% annualized).
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Changes to Investor’s Business Daily (IBD) Top 50 This Week:
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?
Even better, you can become a Terry’s Tips Insider, and receive all our educational reports and materials absolutely free by opening a new account at the best options broker around - thinkorswim. If you open an account with our link, they will give you 60 days of free trading or up to $600, the same deals they give to everyone who opens an account with them. You must use this link to sign up - open thinkorswim account – and once you have funded your account with at least $3500, email Seth@TerrysTips.com and let him know that you have done it, and this is what he will do – sign you for our Premium Service package ($119.95 value plus an extra 4 months of our Premium Service, valued at another $190.80). You get $300.65 worth of services without paying us one penny. I look forward to having you on board, and to prospering with you.
Terry
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