Opening Pandora’s Box? Here’s your trade.
Discussed in this article: Pandora Media ( $P )
I want to look at Pandora ( NYSE:P ). The company announces earnings on Monday, August 26th, that’s two and a half weeks from now. The stock has been in this kind of uptrend but basically the 50-day moving average is acting as support. Right now this stocks in a volatility squeeze. We could very well see this squeeze continue for the next couple weeks, as Pandora ( NYSE:P ) trickles around and traders wait for earnings.
There’s a lot of bearish sentiment out there, a lot of bullish sentiment too. Pandora ( NYSE:P ) has saturated the market and there’s plenty of growth opportunities. So somebody’s going to be right, somebody’s going to be wrong. In between now and when they announce earnings I want you to watch this stock, because we could get a tradable move before then.
As far as trading this after earnings, this is really not something that you can plan right now because the amount of time remaining. So just know that this is the main support level, we’ll call it $15.00. My bet is, if Pandora ( NYSE:P ) disappoints, you’re probably going to get a pullback close to this level.
However, if Pandora ( NYSE:P ) surprises, this stock could run for a while. Right now, what I want to do is just watch this squeeze. If Pandora ( NYSE:P ) pulls back just a little bit, to the 50-day moving average, I think it’s going to be worth a shot. Go ahead and take some stock over the next few days if it does pull back here, because you’re buying it right at support. And then as earnings approaches you’re probably going to see traders start to place their bets and it’ll probably be to the long side.
If Pandora ( NYSE:P ) hasn’t stopped the uptrend now, somehow I doubt that uptrend is going to stop between now and when earnings are going to be announced. So the best thing to do prior to earnings, watch this squeeze, buy it on any kind of support. Be out of that trade before earnings are announced, unless you’re a Pandorian or a Pandorian bear, one of the two. But for now just take this trade on any pullback, and I see if we can’t make some money on this.