DailyPlay – Opening Trade (ADBE) – November 5, 2024

ADBE Bullish Opening Trade Signal

Investment Rationale

Adobe Inc. (ADBE) has recently reached oversold conditions on both daily and weekly timeframes, exhibiting signs of exhaustion that may signal a higher likelihood of a strong rally ahead. Currently modestly undervalued, ADBE trades at a discount relative to its industry, despite growth rates and profitability metrics that surpass industry averages. With a monetized AI product already generating revenue, ADBE presents strong upside potential from a valuation perspective. Additionally, the earnings date for this quarter falls in mid-December. Our expiration date extends beyond this earnings report, allowing us to hold the position through the announcement.

ADBE – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 2 ADBE Dec 20 $475/$495 Call Vertical Spreads @ $9.70 Debit per Contract.

Total Risk: This trade has a max risk of $1,940 (2 Contracts x $970) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $970 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on a stock that is expected to bounce higher off recent lows.

1M/6M Trends: Bearish/Bearish

Relative Strength: 3/10

OptionsPlay Score: 94

Stop Loss: @ $4.85 (50% loss of premium paid)

View ADBE Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View ADBE Trade