ADBE Preview. No trade.

by Dan March 19, 2012 3:46 pm • Commentary
  • The options market is implying about a 4.5% move which is basically inline with the avg move over the last 4 qtrs.
  • Last qtr, their fiscal q4, they beat, but guidance that they had lowered in Nov, stock us now up 31% from those levels and up 21% on the year.

Given the momentum in the market if the company beats and raises guidance iI think there is a strong chance that you see a breakout to new 52 week highs. If the company beats and guides down a tad then the stock probably goes back to support at $32 down about 7% and if they miss and guide down ( I place a low probability on this) then stock prob down about 10% to 31. 36 is the 52 week high and 36.50 is about the highs from 2010 and 2011, so there will be significant resistance at this level.  The street is still fairly mixed on the name with 13 buys, 12 holds and only 1 sell, while short interest is low at about 2.6% of the float.

This may be overly simplistic, but this is where I think we live post the report, in this trend channel, and your guess is as good as mine.

1 yr ADBE chart from Bloomberg


At about the midpoint of that trend channel, flip a coin, I have no conviction, so no trade.