Tesla, $TSLAWealth Strength IndexAAPL is Extremely Up and trending Up, started dropping from a peak in late December and continued to a bottom at the end of May. It started higher in June and broke through the falling channel at the end of the month. It has continued higher in July. Into the report it has retraced 38.2% of the drop and has a RSI holding on the edge of overbought in the bullish zone with the MACD rising and positive.
There is support lower at 253 and 240 then 227 and 215 before 209 and 191 then 178. There is resistance above at 262 and 274 then 294 and 300 before 307 and 321. The reaction to the last 6 earnings reports has been a move of about 6.20% on average or $16 making for an expected range of 242 to 274.50.
The at-the money July 26 Expiry Straddles suggest a larger $18 move by Expiry with Implied Volatility at 101% above the August at 54%. Short interest is extreme at 31.7%. Open interest is spread from 200 to 257.50 on the Put Side but biggest around 240 and 217.50. On the Call side it builds from 240 to a peak at 280 then tails to 300.
Trade Idea 1: Buy the July 26 Expiry 247.50/240 1×2 Put Spread for a 30 cent credit.
Trade Idea 2: Buy the July 26 Expiry 265/270 Call Spread ($1.95) and sell the July 26 Expiry 237.50 Put for free.
Trade Idea 3: Buy the July 26 Expiry/August 285 Call Calendar ($3.50) and sell the July 26 Expiry 237.50 Put for $1.55.
Trade Idea 4: Sell the July 26 Expiry 225/290 Strangle for a $1.50 credit.
#1 gives the downside with leverage and a possible entry at 240 with a basis at 232.50. #2 and #3 give the upside using leverage and may put you in the stock at 237.50. #4 is profitable on a close between 223.50 and 291.50 at Expiry. I prefer #2 or #4.