Apple Supplier Stock On Sale

ADSK shares could rally into December, if past is prologue

Nov 16, 2018 at 10:33 AM
facebook twitter linkedin

While Autodesk, Inc. (NASDAQ:ADSK) hasn't officially set a date to report quarterly earnings, the software concern is expected to unveil its third-quarter figures relatively soon (Thomson Reuters Eikon has a tentative date of Tuesday, Nov. 20). While several Apple suppliers have taken it on the chin in recent weeks, ADSK's recent pullback could be a buying opportunity, if history is any indicator.

After a post-earnings bull gap in August, Autodesk shares went on to touch an all-time high of $159.94 on Aug. 27. Since then, however, the equity has surrendered roughly 16% to trade at $134.37, and is back in a familiar range; the $125-$140 region contained the stock from March until the aforementioned August rally.

However, ADSK is now within one standard deviation of its 320-day moving average, after a lengthy stretch above this trendline. After similar pullbacks over the past three years, ADSK was higher one month later 67% of the time, averaging an impressive gain of 8.8%, per data from Schaeffer's Quantitative Analyst Chris Prybal.

ADSK stock chart nov 16

Should Autodesk once again enjoy a positive earnings reaction soon, an unwinding of pessimism in the options pits could propel the shares higher. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.23 registers in the 89th percentile of its annual range, indicating that near-term options traders are much more put-heavy than usual at the moment.

Short sellers could also be caught off-guard, if ADSK's pullback to the 320-day once again results in a short-term rally. Short interest on the iPad supplier surged nearly 41% in the past two reporting periods, to close to 7.5 million shares.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners