Adobe Inc. (ADBE:NASDAQ)
Price at Preparation: $504.48 (Nov 11th, 2024)
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What they do
Adobe Inc (ADBE:NASDAQ) is a United States-based global technology company whose products, services and solutions are used around the world to imagine, create, manage, deliver, measure, optimize and engage with content across surfaces and fuel digital experiences. It is broken down into the following segments:
- Digital media: Centered around Adobe Creative Cloud and Adobe Document Cloud, which include Adobe Express, Adobe Firefly, Photoshop and other products, offering a variety of tools for creative professionals, communicators and other consumers.
- Digital experience: Provides an integrated platform and set of products, services and solutions through Adobe Experience Cloud.
- Publishing and advertising: Contains legacy products and services. In addition, its Adobe GenStudio solution allows businesses to simplify their content supply chain process with generative artificial intelligence (AI) capabilities.
Welcome back to Theta Bandits Top Pick Tuesday, where we search the markets to bring you fresh ideas that could be a potential winner in any portfolio.
Opinion
Adobe Inc. (ADBE:NASDAQ) has had a volatile year with a range from a low of $433.97 USD to a high of $638.25 USD with usually big gaps forming around their Earnings Reports (ER), with the next ER reporting on Dec 11th, 2024. They have been fighting a few battles from a failed take over attempt of Figma which was blocked, to needing to adjust to the AI boom with images and video being able to be generated with an ever-increasing quality in a rapid timeframe. With their latest toolset introduced recently, hopefully they are putting themselves in that AI race.
From the charts in the recent quarter, ADBE has been on the decline. However, recently the price has started to increase with the markets running post the US presidential election. This stock also seems more often than not to run into their ER and we have about a month until that happens. We can start to create a potential plan, with the first check being “what do the analysts covering the stock say?”
The analyst street consensus is mostly bullish with 30 Buys, 10 Holds, 3 Sells and 12-Month Price Targets (PT) as follows:
- Low: $440.00 USD (-12.78%)
- Average: $610.50 USD (+21.02%)
- High: $704.55 USD (+39.66%)
Plan
As usual, find the chart below with following colors:
- Blue: 52-week high.
- Red: 52-week low.
- Green: 12 Month PTs (high / avg / low).
- Orange: Support/resistance lines.
- Yellow: Our plan.
In the chart below, we have identified the purple vertical line as the next ER and a yellow circle with a question mark as ER can be very volatile with this stock. If you need proof, look to the left where other circles are ER’s showing major moves. Since we always err on the side of caution, securing profit to mitigate risk is a must. If the stock is bought at the current level, we have marked in orange the support/resistance lines with targets to go into ER and secure profit at $517.84 USD, $531.02 USD and $542.97 USD with stop-losses being updated as the price moves through the levels.
Post ER, if the results are favourable, we could gap-up and there are two bonus targets of $561.50 USD and $576.45 USD called out. Since ER’s are volatile this holds higher risk, so hopefully only profits are used at this point. This last level called out does represent a pretty strong resistance from the previous year’s price movement. Breaking through will be needed for the price to move to the 12-month average price target of $610.50 USD.
This is only one method how to trade this movement. We discuss other potential methods to attack this stock through our discord server and we will discuss this trade live IF you sign up to attend our weekly Theta Bandits Webinar – When we trade together, we learn together!
RISKS
The goal is to grow capital by securing profits along the way and limiting losses. Make sure to plan to trade within your risk tolerance, allowing time for success while updating limits and exit points to mitigate risk.
If you’ve been finding our picks helpful, imagine what trading live holds. You know what to do 👇
Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
