Options Corner: DELL Shares Go Parabolic into Earnings

Added: 2026-05-28

[00:00:00]Time now for options corner. Joining us to take a deeper look at the chart is Rick Ducat, our lead market technician.

[00:00:07]All right, Rick, walk us through the trends you notice in this chart.

[00:00:09]>> Yes, very strong lately for Dell in purple here up 168% versus the tech sector XLK ETF up 59 and a half percent during the same time period here. We can also see that these hardware names in general have seen quite a bit of strength. Other names like HPE HP Enterprise in purple, Lenovo laptop maker in white there, Cisco as well, all seeing very big strength here from this AI data center and infrastructure trade that we're seeing. Now, the flip side, the double-edged sword, is that Dell is also kind of seeing a hit to its personal computing business due to very sharply rising memory costs. So, but it seems to be outweighed by the AI data center category so far here.

[00:00:53]When we look at our chart more specifically, a sharp push to the upside recently resulted in our all-time highs yesterday of 312.14.

[00:01:01]For the most part, our trajectory was this upward channel type shape between our two blue lines here. Notably, we had a gap here as well after this brief sideways consolidation, kind of this bull pennant bull flag type of behavior here. We had a high 264, we gapped up, that was the subsequent low. So, 255 to 264 presents an interesting potential supportive area. We also had a low that was established near 300 as well. When we think about our moving averages that we follow here, 5-day EMA in dark blue comes in near 286 roughly or so based on yesterday's close. RSI also pretty strong, 78, close to 80, which is regarded as an extreme bullish reading here. You know, RSI overbought area in a trending market typically is a sign of strength here. So, when we also look at our volume profile study, just focusing on the last 3 months, a bit of a node developing here suggesting potential support from 300 to 310, but down here as well much larger node 235 to 250 could present a foothold for traders.

[00:02:06]Notice as well volume spike very heavy volume during our gap up that we mentioned.

[00:02:11]>> All right.

[00:02:12]Walk us through the example trade approach you would take.

[00:02:15]>> Right. So, if we think about our expected move here for Dell, we're going to focus on June 18th 21 days out. Our yellow box here representing plus or minus 16.2%.

[00:02:26]Remember our gap that we talked about?

[00:02:28]That's the lower edge of that expected move. So, we'll target that for a potential trade idea. Minus one June 18th 265 255 put vertical at a 250 credit. 250 $250 max profit is the credit received here. Max loss is 750.

[00:02:44]So, uh one to three in terms of reward versus risk a common type of setup that uh many traders look for. Break even 26250 about 18% or so to the downside.

[00:02:55]Expected move plus or minus 16% as I said. So, within that range here, but this would be more of a higher probability setup looking for that gap to hold and based on that expected move range projected by the options market in this case, Diane.

[00:03:09]>> All right.

[00:03:11]Uh that's an example trade there for Dell which has earnings due after the bell today.