Adobe - Earnings special

Elliott Wave | ADBE CMP: 546 | Dt 12/09

Simple speak

• Tl;dr - Based on our EW count, Adobe’s price should increase post earnings. However, given high option premiums and various resistance levels in close vicinity, the Risk reward is not in favour of an earnings play. We recommend not to trade Adobe at Earnings.

• Okta posts earnings on 11th Dec, after close.

• Options premiums are suggesting an 8% move in Adobe post earnings. This move is already factored in Option premiums. If you make a straddle then you will need a move of 8%+ either side to breakeven.

• Looking at the Adobe chart, its channel and our EW count, you can see the three target levels if the results are good, in decreasing order of likelihood

  • Channel top acts as resistance - 1% gain

  • Massive resistance band acts as resistance - 5% gain

  • [Extreme scenario] Previous highs act as a resistance - 13% gain

• And three target levels if the results are not great in the same decreasing order of likelihood

  • EW Wave count max drop - 3% drop

  • Long term support level - 5% drop

  • Channel bottom acts as support - 13% drop

• Given Adobe is in Wave 3 advance, it is likely to rise post earnings.

Chart speak - Earnings

Chart speak - Long Term View

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