EOT Trade Alert – December 3, 2015
Trade Alert:
Buy FB January 15th 2016 $110.00 calls at $1.95 or better
Company Background:
Facebook (FB) is a social networking company.
Short-Term Catalyst:
The social networking site is quickly becoming the advertising platform of choice for large and small businesses alike. They’re already one of the top sellers of ad space online.
Now FB is looking to expand the depth and reach of its advertising to generate even more revenue. They’re carving out a piece of the advertising budgets that have traditionally been spent on Television adverting.
FB now offers video ads. They can be used to supplement ads already running on TV or they can be independent.
Here’s why advertising partners love FB video ads. The FB video ad hits its target audience more often than TV ads. That means the adverting dollars spent on FB are delivering more bang for the buck than TV ads.
In fact, ad buyers that combine TV and Facebook ads saw a 19% jump in reaching their target market. This is another huge development for FB… and one that the current stock price doesn’t fully account for.
Facebook is one of the key cogs of bullish momentum for US stocks. FB’s 36% year-to-date gain is crushing the S&P 500’s gain of 3%.
The stock reached a high of $110.65 in November. It has gone through a consolidation period over the last month. The current stock price is just above the upward trending support line.
Simply put, FB is primed to make another run to the upside with the bullish fundamental and technical aspects of the stock. Let’s grab call options on FB to profit from the next leg higher.
Trade Details:
| Underlying Stock Symbol: | FB |
| Current Bid-Ask Price: | $1.85- $1.88 |
| Option “Buy Up To” Price: | $1.95 |
| Break-Even On Stock At Expiration: | $111.95 |
| Maximum Risk Per Contract: | $195.00 |
Exit Strategy:
FB is trading at $104.82 per share. Resistance levels will be at $110.00 and $115.00. Remember, we want this stock to move higher. Support levels will be at $100.00 and $99.00. Conservative investors should look to exit at the first support or resistance level. Aggressive investors may want to hold for a bigger move.
Chart:
Category: EOT Trade Alert
