Now, usually I stay away from stocks that just reported because the news overrides the technicals and if the stock had a really good earnings, people just keep buying it, driving the price yet higher.
However, I think this is a good opportunity for a straddle. A 1:2 straddle. One half the amount you would usually bet on a call, and a full amount you usually spend for the put side. Lets take a look at the chart:
Looking at todays candle, you can see that it has a big upper tail, which signals that the stock hit its top and will come back down. However on the flip side of that coin, there was a big gap up from the previous days candle price and that is a big bullish signal. So now if I want to handicap this and decide the odds, I can then devise a strategy that I will use to pull some money. I am going to do a full priced (money I usually spend per pick) put on this:
And also at the same time, I am going to do that half priced call (spending half the money I usually spend on a put/call):
Now I have my 1:2 straddle.
You gotta risk it for the biscuit.
Tradinginsider.
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