Cloud Kings Arising Pt. 1

I wanted to give you a heads up on a setup on one of my favorite tickers — Adobe. Now that the earnings report is complete — and the stock experienced a pullback, within the expected move — I can look at it for a swing trade.

Adobe is one of my favorite stocks to trade.

Why?

It has a relatively predictable pattern. I especially love to trade this one on a run going into earnings. Currently, it has a daily squeeze, and Phoenix shows it’s starting to turn higher. Additionally, it’s one of my top companies listed on my Phoenix Folio, and it’s also a part of my Cloud Kings list.

From a macro perspective, Adobe doesn’t really have a strong competitor in the content creation suite line. Adobe’s shift to the cloud in key software products, now considered software as a service, (in the likes of Adobe Lightroom and Adobe Photoshop) is able to keep customers within their ecosystem in a more consistent manner than the previous one-off purchase model. They have an expanding revenue base with their customer experience management system as well. Their products are top line, and with their unique offerings, they command a large part of this space.

How I’m Trading It

Check out my video from last night here for an in-depth analysis.

Due to the fact that ADBE does have overhead resistance at $265, I’m trading this name with two conservative butterflies, a regular fly and an unbalanced, and putting on one long call for good measure.

Want to Learn More?

As mentioned earlier, ADBE is one of my favorite picks from the Phoenix Folio. I’m watching ever so closely to resistance at $265. Want to Find Phoenix yourself? Join me on April 4th for live trading. Get all the details here.

P.S. I’ll be sending out a special Pt. 2 edition to this issue later on today, so be on the look out for that in your inbox. You’ll definitely want to check it out because it’s all about Netflix.

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