Tiffany & Co (TIF) is a company operating specialty retailers offering mainly jewelry. The stock is currently trading around $81.05 in a 52 week range of $55.83-$83.48. The stock has had a great year having added nearly 42% to share prices this year. TIF is set to report their most recent quarterly earnings before the market open tomorrow. The stock has mixed historical performance on earnings day. Over the past 8 quarters the stock has rallied 4 times and sold off 4 times with an average move of 5.3%. However, the stock has rallied 3 times over the past 4 quarters. Technically speaking, the stock is trading in bullish territory according to the Ichimoku Cloud. The future cloud is also upward sloping indicating a potential for more upside in TIF. We believe the technical and historical data lines up well for a long in TIF ahead of earnings. To set up a trade we must first develop an upside target. The options market is currently implying a move of $4.60 by Friday’s expiration. We will use this implied move to calculate an upside target of $85.65 and set up a trade.
Trade: Buying the TIF Nov 29th Weekly 83-85 Call Spread for $0.65
Risk: $65 per 1 lot
Reward: $135 per 1 lot
Breakeven: $83.65
