Bullish – TMUS – $105.35
The S&P 500 ended this week on another strong note with the market rotating out of the crowded tech sector into small caps, value and sectors that were lagging behind. This is a healthy sign for market rallies and leads to a potential breakout above the $323 recent high in SPY over the next few trading sessions to weeks. A break below $310 would bring $300 back into play, but our base case is a breakout with targets of $335-340 to the upside.
TMUS Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang looked at TMUS and the outperformance relative to its peers. With 35 Million unemployed, T-Mobile targets price sensitive consumers from AT&T & Verizon along with award winning customer service. With strong estimate revisions and low volatility expected for earnings, he expects mild upside on earnings with a longer term bullish view. Expecting TMUS to remain muted on earnings, Tony is using a Aug 7/Sept $105/$110 Call Diagonal @ $4.25 Debit. As of Friday’s close, these calls were trading for $4.18 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience.
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