Zoom Communications (Update)
$ZM
Follow-up from Septembers post -
This one’s worked, and ZM 0.00%↑ continues to build out a base as it currently sits within a pretty meaningful gap range from 2 years ago.
This is a situation where I’m locking in gains and watching to see how price actions resolves around the gap range shaded above.
But I’m not entirely out of the name. I’ve moved my position type to put spreads, which I am selling (bullish). I’m going out to the back half of the year with some spreads at $60-$70 range, which is where much of the recent price action has occurred. The 200 day moving average is sloping upwards as well, and this gives me confidence that the stock has ample buyers in that range.
The company reports earnings in early March, so we should see implied volatility slowly rise, increasing the premium available on this type of trade. The ideal scenario is a bullish reaction post earnings that allows for at least a 50% lock in on the trade. But this type of trade also provides the flexibility to consider getting back in if the stock sells off. More to come as earnings approach …