On the back of bad ESPN numbers, the stock sold off all the way down back under 90. Since then it started to base out and began a run into earnings in May…
… and then earnings came out. Pretty decent gap down, and that changes the entire psychology of the trade from hope to fear again.
Since then the stock has been trading just under 100 for a month. It hasn’t participated at all with the recent market rally.
Odds are, 95 will act as a magnet. If the stock loses that, then 90 will be the next target.
Here’s the trade:
This bet is pretty simple. Don’t worry about stops as the risk is limited, and if you catch a double then sell half and work with only house money.
If you want to be more aggressive, then the Jul 95 puts straight up with a stop above 2 week highs is a reasonable bet.