Citrix Systems (CTXS) develops and sells products and services that enable delivery of applications and data over public, private or hybrid clouds or networks, to virtually any type of device. They reported earnings back on April 20th and shot up like a rocket. After putting in a high print at $90.00 it has falling off a bit. Take a look at the chart:
What is important to note is twofold. One, even though it has fallen off a bit, it has respected the longer term trend line (shown in yellow). Two, we have a technical trigger (inside bar entry) that formed late last week and triggered on Monday morning. This was our signal:
5-9-16: Based on our methodology a signal has been generated:
Sell (opening) the CTXS May 82.5 call
Buy (opening) the CTXS June 82.5 call
For a debit of $1.25 or less.
This signal is not GTC and is valid with CTXS trading $81-$82.
This type of signal works best with a slow “grind” type of move up to the short strike. If all goes according to plan, our investment of $125 per one lost will have an ROI of approximately 60%. You will also note that even if CTXS does not rally, the spread still has a positive result and even in CTXS moves down about 2%, we estimate that we will only experience a loss of about 9%.
