Bank of Montreal (BMO) is a financial services provider that provides retail banking, investment banking and wealth management in the U.S. and Canada. The company’s stock is currently trading around $69.40 per share in a 52 week range of $55.61-$71.26. The stock has been strong this year but is lagging the market some having added only 13.25% to share prices this year. BMO is set to report their most recent quarterly earnings tomorrow before the market open. BMO has been a strong stock on earnings day over the past 8 quarters. On earnings day the stock has rallied 6 times of the past 8 releases. The stock is also trading very well on a chart. Shares of BMO are trading well above the Ichimoku Cloud and are just off of their 52 week highs. The future cloud is also upward sloping indicating there could be more upside in store for BMO. We believe that the strong historical performance in BMO and the bullish chart set up present a good opportunity to get long ahead of earnings. With December options implying a mo0ve of $2.00 by expiration we will look to set up a trade with an upside target around $72.00.
Trade: Buying the BMO Dec 70 Calls for $0.60
Risk: $60 per 1 lot
Reward: Unlimited
Breakeven: $70.60
