Mid-Market Update for 2/15/2017

GoDaddy (GDDY) Earnings on Deck/ Profit Alert (TSEM)

1:10pm (EST)

Shares of GoDaddy (GDDY, $36.74, up $0.40) will be on the move in extended trading as the company is set to announce earnings after today’s closing bell. The chart looks bullish as all of the major moving averages are in solid uptrends. The 50-day moving average is especially showing a nice curl and represents near-term support at $36-$35.50. Resistance is at $36.75-$37.

The company is expected to earn $0.09 a share on revenue of $485 million. The high estimate is pegged at a whopping 10 cents higher for a profit of $0.19 a share. The low estimate has GoDaddy earning $0.03 a share. This equates to a possible headline of a 10 cent beat or a 6 cent miss.

GoDaddy has topped estimates in three of the past four quarter by two and three cents, twice, sandwiched with a miss by four cents.

The option market is pricing in a possible 7%-10% move with the near-term February call and put options. The GDDY February 37 calls (GDDY170217C00037000, $1.20, up $0.20) and the GDDY February 36 puts (GDDY170217P00036000, $1.00, down $0.15) are going for $2.20, together, and expire this Friday.

If shares trade above $39.40, or below $34, by Friday’s close, the aforementioned options would double from current levels, depending on direction and if you bought the calls or puts. As a strangle option trade, you could offset the risk of being on the wrong side of the trade by buying both options. However, shares would need to trade past $41.40, or fall below $31.60, technically, for the trade to make a triple-digit return.

I’m more bullish than bearish on GoDaddy and have the GDDY March 38 calls (GDDY170317C00038000, $1.15, up $0.10) on my Watch List. These call options would give the trade an extra month to play out and would double from current levels if shares clear $40.30 by mid-March.

The 52-week peak for shares of GoDaddy is at $37.40 and why a run past $40 could easily be in the books on a beat-and-raise quarter. Of course, an earnings miss, or lowered guidance going forward, could send shares tumbling 5%-10% to the downside.

I’m still on the fence because I don’t like the risk involved around trading an earnings announcement although the profits can be powerful. Additionally, there has been heavy buying in the GDDY February 35 puts (GDDY170217P00035000, $0.65, down $0.10) as nearly 2,000 contracts have traded. This might be “smart money”, or dumb money, being wagered on a drop below $35 by Friday’s close.

The portfolio has gotten off to a sweet start at 12-2, and while I could be more aggressive, I still want to do a little more research on GDDY. If I take action today, I will certainly send out a Trade Alert.

Turning our attention to the market, the bulls continue their roll with momentum still strong as fresh highs are in play once again. The Dow is up 83 points to 20,587 while the S&P 500 is gaining 6 points to 2,343. The Nasdaq is surging 19 points to 5,801 and the Russell 2000 is flat at 1,396.

I have updated our current trades, along with a Profit Alert for TSEM, so let’s go check the tape.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 9-2 (82%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records.

Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the 8am and 12pm–2pm (EST) updates. Also, I will usually give you a heads-up if I think I’m going to send an Trade Alerts outside of these time frames.


Jabil Circuit (JBL, $25.32, up $0.16)

JBL March 26 calls (JBL170317C00026000, $0.65, flat)

Entry Price: $0.65 (2/13/2017)
Exit Target: $1.30
Return: 0%
Stop Target: None

Action: Resistance is at $25.75-$26. Support is at $25.25-$25.


Flex (FLEX, $16.41, up $0.14)

FLEX March 16 calls (FLEX170317C00016000, $0.60, up $0.10)

Entry Price: $0.40 (2/10/2017)
Exit Target: $0.80
Return: 50%
Stop Target: None

Action: Fresh resistance is at $16.50-$16.75. Rising support is at $16.25-$16.


Viavi Solutions (VIAV, $10.69, up $0.07)

VIAV March 10 calls (VIAV170317C00010000, $0.85, flat)

Entry Price: $0.40 (2/8/2017)
Exit Target: $0.80
Return: 112%
Stop Target: None

VIAV March 9 calls (VIAV170317C00009000, $1.65, flat)

Entry Price: $0.50 (1/25/2017)
Exit Target: $2.00
Return: 230%
Stop Target: $1.30 (Stop Limit)

Action: Resistance is at $10.75-$11. Rising support is at $10.50-$10.25.


Boston Scientific (BSX, $25.39, up $0.21)

BSX March 25 calls (BSX170317C00025000, $0.90, up $0.25)

Entry Price: $0.70 (2/7/2017)
Exit Target: $1.40
Return: 29%
Stop Target: None

Action: Resistance is at $25.50-$25.75. Support is at $25-$24.75.


Tower Semiconductor (TSEM, $21.81, down $0.35)

TSEM March 23 calls (TSEM170317C00023000, $0.30, down $0.20)

Entry Price: $0.45 (2/7/2017)
Exit Target: $0.90 (closed half at $0.80 on 2/13/2017)
Return: 28%
Stop Target: 35 cents (Stop Limit)

Action: Close the other half of the trade. The Stop Limit has triggered with today’s pullback.


TherapeuticsMD (TXMD, $5.88, up $0.02)

TXMD June 7.50 calls (TXMD170616C00007500, $0.60, flat)

Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: -20%
Stop Target: None

Action: Resistance is at $6. Support is at $5.75-$5.50.