Hertz Global (NYSE:HTZ) rescheduled its earnings Wednesday morning. It started higher but then sold off quickly before a rebound. That action created a bullish engulfing day, adding to the previous price action before closing a gap higher.
Sharks And Crabs
The below chart was presented to subscribers ahead of earnings. It shows the price action creating a Shark harmonic and retracing 50% before building into a Deep Crab, with a PRZ at 33. I’ve added the resistance zone in deep red to show how close it is to a breakout after the report. Also notice how the RSI, MACD, SMA’s and Acc/Dist are all in a slow trend higher.
With earnings behind it, HTZ may be ready to trend higher again.
How To Play This One
There are a couple of ways to trade this. You could use the 20- or 50-day SMA as a stop and enter now. Or you could look for a break of the resistance zone as a trigger to enter. But as an options trader there are even more plays. A simple one is to buy the June 29 Calls (offered at $1.25 as I write) for a defined risk trade. Or for a more complex trade, the June 26/29 bullish Risk Reversal (80 cents) gives protection to the bottom of the consolidation zone and lowers the cost of the trade. And for the trader looking for even more leverage, a September 29/33 Call Spread Risk Reversal selling the September 26 Put is nearly free with the same downside risk.