On August 8th after the closing bell, Uber (NYSE: UBER) will be releasing their much anticipated earnings. Uber IPO was backed by incredible craze and anticipation and since open has done little to no movement. Many investors have been upset with the progress of how Uber is moving since the release of their stock and have began to become impatient with the lack of profits being generated.
Since before the company went public there was rumors as to how Uber generates revenue and if their business model is sustainable for the future as more techonolgy advances in the coming years. Many felt that the technology behind Uber will be short lived and does not provide enough support to show that it will be able to remain in business for years to come.
Uber Takes to the Skies
Uber has caught my attention due to its interest in Vertical Take off and landing Aircraft that they plan to operate without a human pilot in the vehicle. They already have helicopter services in various locations around the world. This allows for an individual to be able to request for a helicopter with a click of a button on their Uber app.
Some of the main benefits that lie behind this technology is being able to provide the servifes to the select group of individual who are capable of affording these kinds of transportation services and offering them at a premium while also being quick and easiliy accessible. They are planning on disrupting the way individuals commute within the city limits by allowing for battery powered aircraft to provide quick and safe travel from one point to another.
Over the last few days we have seen Uber stock push down into new lows that we have not seen since the start of the company. Many investors are beginning to worry as we near closer to earnings day for Uber.
I personally have read various headlines warning investors of potential sell offs that could occur tomorrow in fear of poor earnings for the stock. Although the headlines told investors to run to the hills I decided to take a second look at the technical aspect of UBER to see how price is currently playing in the hours prior to earnings release.
The technical Analysis
We see price is currently testing on the channel drawn from the open of UBER following the current trend that it is on. We see how price has been pushing and is now currently sitting above $39 and yet Below $40. This is a great price for the stock to be sitting at. This is right in the area where we see price tried to enter before back in June and could not.
As the news headlines and the current trend continues to push downward there is great potential for securing a position on UBER as price is relatively low compared to historic levels to be able to be in a position to profit as price returns back towards its trading range from this current low.
This morning seeing how price was now pushing below $38 I felt it was appropriate to enter a Call position against the trend to be able to profit off the push up off $38. Being that price has been in down trend I was able to purchase the Option extremely cheap.
MY trade idea
This morning I purchased a call on UBER with the Aug 9th Expiration date with a $44 strike price. With the call being an Out-of-the-Money call it was relatively cheap for only $0.23 a share. during the day as price creeped up slowly rejecting off the support price moved up a total of 1.40% bring price just under $40.
With tension of earning reports tomorrow the options for UBER currently have a great amount of volatility. We are able to take advantage of this voltality and earn a total of 152% on our option in just one day. For an option that only cost $0.23 a share we earned $0.35 per share in profits. Not a bad day for today trading Uber being able to secure a strong profit during such a rocky market.
I will wait until the market open tomorrow to see how I play the trade to make sure I do not get caught in any traps from the market. To see which trade I will be taking tomorrow make sure to follow me on stocktwits to get in the moment updates on any open trades.
I closed the trade on Uber out the same day also for a few reasons. First one being that tomorrow I am not sure how the stock will react to the market open. With headlines that have been released there is a strong chance they may push the market in the desired direction or we see the complete opposite happen and price spikes up before news. Either or could signal a different move towards how to be able to trade effectively.
Secondly its important to not be greedy when trading. This trade just earned me 152% returns on my money. There are not many other locations or opportunities in the world present that allows someone to be able to generate 152% returns on their money in less than an 8 hour window.
This is one of the main reasons I really enjoy the market. It allows for individuals like you and I to be able to increase our income to be able to have more resources to provide for those we love.
If you are interested in partnering up with me to be able to strategize and mastermind on upcoming trades to have the potential of earning 152% on trades then click the link below!
Leave a Reply