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We took profits on our ADBE March 29th $260 Put Writes two weeks ago. ADBE’s earnings report represented too much risk to keep our position in the stock active at that time. That turned out to be the right call, but we think the initial reaction was overdone and the stock’s underlying fundamentals are still some of the best in the market.
Partnering With Microsoft
ADBE and Microsoft (NASDAQ:MSFT) are teaming up to expand their marketing and sales software capabilities. We’ve said before that any expansion of the services ADBE offers is positive. The stock was up slightly yesterday when the news was announced via a press release.
But the technical picture is just as important for ADBE, and we think it makes an even stronger case for selling puts on ADBE.
Investors Looking for Income and Growth
ADBE’s relative performance since last week has been evidence that if investors are going to move capital, they are favoring income and/or solid growth. That helps put the odds in favor of ADBE breaking back up through resistance in the short term.
Daily Chart of Adobe (ADBE) — Chart Source: TradingView
ADBE has continued to slowly melt above resistance and the large “double bottom” pattern we discussed earlier this month. If the market turns a little more bullish as the S&P 500 reaches support, we should be in a good position to take advantage of a much larger move to the upside.
To find out which puts we’re selling — and to get access to our full portfolio of income-generating trades — consider signing up for risk-free trial subscription to Strategic Trader today.
InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of Strategic Trader.
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