DailyPlay – Opening Trade (TMUS) – June 06, 2025

TMUS Bearish Opening Trade Signal

Investment Rationale

Investment Thesis:
T-Mobile US (TMUS) presents a compelling setup for bearish positioning as its stock struggles to sustain upward momentum amid valuation excess and technical exhaustion. While the company benefits from solid operational metrics, its premium valuation relative to peers is increasingly difficult to justify in a decelerating growth environment. The recent rally into overhead resistance levels adds to the case for a downside retracement, offering a tactical opportunity for short exposure through options.

Technical Analysis:
TMUS recently rallied off its May lows but has stalled below the $250 resistance zone, an area that coincides with the declining 50-day moving average. This level has repeatedly capped price advances since March, indicating strong supply pressure. The stock remains below both the 50-day and 20-day moving averages, reflecting short-term weakness, while relative strength continues to lag versus the broader market. With RSI hovering near neutral levels and the broader pattern forming a potential head-and-shoulders top, downside risk toward $215 appears increasingly probable.

Fundamental Analysis:
TMUS trades at a significant valuation premium despite only modest outperformance on growth and margin metrics.

• Forward PE Ratio: 22.76x vs. Industry Median 10.85x
• Expected EPS Growth: 15.59% vs. Industry Median 5.12%
• Expected Revenue Growth: 5.22% vs. Industry Median 2.29%
• Net Margins: 14.41% vs. Industry Median 12.72%

These figures show TMUS is slightly ahead of the industry on performance but drastically more expensive, suggesting overvaluation risk if growth expectations moderate.

Options Trade:
To position bearishly, consider selling the TMUS July 18, 2025, 250/260 Call Vertical. This spread profits if TMUS stays below $250 through expiration and results in a favorable reward-to-risk ratio of 0.60. This risk-defined strategy allows traders to capitalize on the resistance zone holding without needing an outright collapse, simply a rejection below the $250 ceiling.

TMUS – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 3 TMUS July 18 $250/$260 Call Vertical Spreads @ $3.74 Credit per Contract.

Total Risk: This trade has a max risk of $1,878 (3 Contracts x $626) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $626 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower off a recent area of resistance.

1M/6M Trends: Neutral/Neutral

Relative Strength: 5/10

OptionsPlay Score: 106

Stop Loss: @ $7.48(100% loss to value of premium)

View TMUS 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 Thursday’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 TMUS Trade