Wednesday evening will bring out the heavyweights. We'll hear from Facebook (FB - Get Report) , Microsoft (MSFT - Get Report) , Tesla (TSLA - Get Report) , and Visa (V - Get Report) , among others. One name that has been spoken of often at the analytical level will not make the headlines like these others will, but bears some watching. SeviceNow (NOW - Get Report) is a significant player in the cloud space. No need to add there? I hear you. Perhaps broaden the exposure then through a mini-rotation.
Over the past few weeks, NOW has been mentioned by analysts at Morgan Stanley as a "disruptive share gainer", as well as by analysts at Piper Jafferey, at RBC Capital Markets, and at Wedbush Securities as a potential target among others for a larger business looking to expand or strengthen their business cloud space. Let me think. Amazon's (AMZN - Get Report) is number one. Micorsoft's Azure is right behind. International Business Machines (IBM - Get Report) has made the leap with RedHat (RHT) . The name most often mentioned as far as I can see would be Alphabet (GOOGL - Get Report) . Now, speculation like this is never a good reason to invest. Remember, Morgan's words... disruptive share gainer. Hmm. Growth expectations from this year into next are impressive.
First thing that I notice is the nearly perfect Fibonacci retracement that found support in mid-November, and then a series of higher lows that run right into... what's resistance called when it works like 10 times in a row? I don't know, but something has to give here. The 50 and 200 day SMAs appear to be setting up the potential for a golden cross should tonight's earnings go well. Am, I truly convinced? I never am, but I do see the set-up.
I expect to leg in at about a one-eighth stake this afternoon. I expect to see revenue growth north of 31% this evening, but guidance as always will take a lead in priority over performance. Hard to say where the shares will trade at that time. My thoughts would be to sell covered calls at a strike premium of about $7.50 simultaneous with puts running perhaps a little cheaper than that just in case. The effort will be to lower net basis by a rough $5 ahead of tonight's digits. Target Price? I think the name can move above the September $205 highs, especially if any additional value is added on spec.
(An earlier version of this column appeared at 8:13 a.m. ET on Real Money, our premium site for active traders. Click here to get great columns like this from Stephen "Sarge" Guilfoyle, Jim Cramer and other experts throughout the market day.)
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