When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Tech Alert - (ADBE) – EXPIRATION – TAKE PROFITS
Expiration of Adobe Inc. (ADBE) November 2019 $250-$255 in-the-money vertical BULL CALL spread at $5.00
Closing Trade
11-15-2019
expiration date: November 15, 2019
Portfolio weighting: 10%
Number of Contracts = 25 contracts
Software growth stocks have had a hard time lately and this was a flight to software safe trade.
Since the migration to safer balance sheets, I parked my money into Adobe who had a great earnings report.
The stock had done nothing except skyrocket since I executed this call spread and shares are trading around $297 at the time of the writing.
While we held this call spread, there were 4 analyst upgrades based on its latest software for creative professionals, which it announced at its Adobe Max conference in Los Angeles.
Adobe is a great non-China software play.
They are a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote, and monetize their digital content. Its flagship product is Creative Cloud, a subscription service that allows customer to download and access the latest versions of its creative products.
They will keep posting positive earnings results unless there is some type of seismic shift that deteriorates its competitive advantage.
The company continues to show no mercy by expanding revenue 25% year-over-year.
Adobe’s portfolio of solutions is the gold standard for creating and managing the world’s digital experiences through its apps and cloud products.
Software stocks are the optimal late-cycle stocks and I have been whacking every bush in the outback to spread the message that instead of opting for hardware, software protects investors from many of the treacherous traps out there now.
But the most regenerative trends out there are many companies are bypassing or delaying exorbitant capital projects like new chip factories or new hardware product lines because of the high-risk nature of the economy peaking, in place of fine-tuning processes that are directly correlated to higher software procurement.
This stock fits that procurement bill with millions of consumers dependent on critical apps like Adobe Photoshop and PDF for personal and professional endeavors.
I know I am!
A ceaseless pipeline of enterprises the world over is relying on Adobe every day to help them transform their businesses and the success is vividly showing up in the numbers.
The branding power and the continuous product innovation and services, the deep investment in technology platforms, and a robust ecosystem of partners are enabling Adobe to serve millions of customers swelling the top line.
The expanding addressable markets in the creativity, document, and customer experience management categories are an opportunity that has never been greater.
Long-term investors should hold until infinity.
Expiration of 25 November 2019 (ADBE) $250 calls at………….………$46.95
Expiration of short 25 November 2019 (ADBE) $255 calls at………….$41.95
Net Proceeds:……………........................…………….………..………….….....$5.00
Profit: $5.00 - $3.90 = $1.10
(25 X 100 X $1.10) = $2,750 or 27.50% in 31 days.
