Going Apple Pinning

Although I like Jabil Circuit (JBL) as a tech buy-write name, I find it hard to get behind this one into earnings based on the current chart setup as well as the pattern we've seen in earnings the last few months. It is hard to anticipate any more than an inline report overall, but revenues would be my main concern. The one plus for JBL bulls is revenue shortfalls haven't always resulted in a downfall, so as long as the company delivers on the earnings-per-share (EPS) front and can avoid a big guide down, then an earnings miss will not necessarily denote a big move lower. Still, I believe the upside will be limited.

Jabil Circuit (JBL) –- Daily Source: StockCharts.com View Chart » View in New Window »

Options are pricing in about a 10% move, maybe slightly less, but I feel that one may actually be a stretch here. I would be much more comfortable buying this stock around $20 on its longer-term support line. If I were going to play this one and have the intent to buy around $20, then my approach would be to buy 1 October $22 puts and sell 2x October $20 puts for $0.40 or less. I believe the upside potential is to $22.50 with a possible push to $23.50. The downside target is $20 here although I see a bounce to $20.50 immediately off of $20 unless JBL gaps below $20. Under $20 makes $18 possible, but I don't foresee that as likely here. I am not doing a trade on this one; however, as I will be writing in the Real Money Pro Daily Diary tomorrow, I want to keep the potential for early morning reactions to a dull roar....195 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.