Does anyone have thoughts on BA earnings release? Not so much your ideas on direction (I have a clear idea on that), but more towards the sector market conditions and any pitfalls of defense sector? I don't follow the defense sector closely at all, so it's not my wheelhouse, but I'm also sitting on more gains today than I know what to do with, and my read on BA's technicals is a big move after earnings for even a slightly off the consensus. I'm happy to make a small play on this one.
Well, I pulled the trigger on the ATM 4/28 Put...So, for some accountability now that market is closed, my rationale is that the market is overly optimistic on a forward P/E that's high of the mark. Forward P/E is 23, and 19 is where to look. Anything but a solid earnings beat should push this one down on the order of 3-5%, which gives a target of $178 on the high side and $175 (a 19 forward P/E with an assumption of an earnings overreaction). Ideally, looking at a 100-200% during the opening minutes tomorrow. I'd view anything short of 2.20 qEPS as supporting the above. ...and that should all be taken with the grain of salt that I know nothing of Defense sector, so this is just a shot in the dark. But that is more or less my typical rationale behind an earnings play--I'm currently at 7 for 9 on earnings releases this year...lets see if we can go 8 of 10!
Horse shoes, hand grenades, and options trades... Close enough to mark this one as a "W", but certainly not a pretty victory. A bit like Green Bay eeking out a win against a high school team in OT.