Autodesk, Inc. (ADSK) is a company that develops design software for customers in architecture, engineering, and digital media industries. Shares of ADSK are currently trading around $40.90 in a 52 week range of $30.22-$42.82. The stock has been strong this year adding to share prices by over 15% year to date and over 26% in the past 12 months. Unusual activity in ADSK indicates to us that traders believe this run will continue through the end of the year. Early in today’s trading session a trader bought 10,000 ADSK Dec 44 calls for $0.88. This block represents volume 2.6 times the average daily option volume in ADSK. This is a very bullish trade that expresses this block trader’s belief that the stock will rally through the end of the year. The chart of ADSK also confirms that the stock is trading in bullish territory and could have more upside to come. Shares are trading well above the Ichimoku Cloud with the future cloud strongly sloping higher suggesting higher prices in the future. Given the technical strength in ADSK and the bullish unusual option activity we believe that ADSK sets up well here for a swing trade.
Trade: Buying shares of ADSK at $40.90 with a stop at $38.30
Risk: $2.60 per share
Target #1: $42.20
Target #2: $43.50
Target #3: $46.10
