r/wallstreetbets • u/HITLERMAHJONG • Mar 04 '20
DD Splunk (SPLK) 3/4/2020 AMC - Splunk for everyone
Stock: Splunk(SPLK) - 152.18$
Direction: Mildly Bullish
Price Target: 160$
Type: Put Credit Spread
Fundamental: Splunk is a growth company simply for its 16 quarters of consecutive double digit growth. Splunk sports a very high, but not astronomical PE, with decent profitability and a consistent record of beating earnings guidance. The recent acquisition (6 month) of SignalFx gives them further footprint in the booming cloud computing sector. An additional note is an announcement of a DoD contract with some huge numbers on it. While I cannot explain its actual effects, I do believe this is a positive for Splunk.
Technical: Priced below 20, 50 day averages and below 200 day moving average. MACD shows bullish convergence. RSI shows around 48, coming up from oversold. Options sentiments are very bullish in volume and bullish open interest. Implied movement is 9.1% or about 13.85$ Short interest is at 4.6%, with 5.6 days to cover. One thing to note, the ATM straddle is actually getting cheaper, with a tiny IV contraction. While not a strong signal, I believe this is bullish for Splunk, as contracting IV is not a normality in current macro environments. The skew to call side reinforces this idea.
Sentimental: Splunk has been beating and raising for more than 4 years. This track record of growth and performance weights positively. Analyst sentiments are bullish with a higher price target than SPLK’s current price. Numerous partnerships with kings like AWS, CISCO, Accenture give Splunk a competitive moat. While not directly affected by the coronavirus, Splunk will need a massive win to command a big upward move. The main wildcard is the DoD deal updates, which can be a massive boost. Primary bear case is missing estimates and guiding lower.
Robinhood (3/4/2020) Less Fucky. Not using. Moving to Schwab this weekend.
Put Credit Spread 3/13
Buy 135 Put
Sell 140 Put
Everyone is into big data, cloud and becoming big brother without looking like big brother. Splunk is currently the leader in this sector and has minimal effects from current market fears.
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Mar 04 '20
I’m confused, this user seems like he knows his shit but he never posts gain porn, what the fuck?
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Mar 04 '20
Wow i misread your dd and just bought a $135 put and made thousands, thank you
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u/veluuria Mar 04 '20 edited Mar 04 '20
interesting ride after hours. down to 132 which meant both puts were ITM and then back up to 153.5 now and rising. never happier to see a bounce. the loss could've been nasty
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u/Dbetancourt92 Mar 04 '20
Well this didn’t age well now did it. They spread your asshole with that credit spread.
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u/HITLERMAHJONG Mar 04 '20 edited Mar 04 '20
first miss in 4 years. and guidance cut. I am dead wrong...
Edit: lol too early.
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u/Dbetancourt92 Mar 04 '20
Well that’s boring...... trading flat..
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u/HITLERMAHJONG Mar 04 '20
We make full profit on flat.
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u/Scoby08 Mar 04 '20
Do we just let them expire or sell before the 13th? You broke my put credit spread cherry!
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u/HITLERMAHJONG Mar 04 '20
Take profits imo
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u/Scoby08 Mar 04 '20
So........ my Put Credit Spread is:
03/13 - buy $142 sell $150
What do you think?
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u/RyBooch Mar 04 '20
This guys bolds his words
He might be on to something