DBX AB/CD

Dropbox (DBX) has its Quarterly Earnings Report in a couple weeks on 2/18/21 after market. That gives us 8 more daily candles (Equity markets are closed Mon 2/15/21 for President's Day). We only need 4 more candles of today's size to hit the D point of the AB/CD pattern.

I plan to exit before the Earnings Report even though its a Bullish chart. These reports are too much of a crap shoot without some kind of edge other than the current chart. There are strategies for trading Earnings Reports, but I only tested one of them and it didn't work. There is another one I'd like to test but haven't yet.

The top chart is a wider view of the Daily chart to include the AB/CD projections for 1:1, 1:1.272, and 1:1.618. The second chart is a close up of the Daily to see better detail of the recent price action.

I see a number of Bullish indications:

• J-Hook candle pattern
• Bounce off the 50sma
• Couldn't hit the 50% Fib on AB
• Bollinger Bands/Keltner Channel Breakout
• Positive Stochastics Divergence
• Higher highs
• Above all Moving Averages
• Possible AB/CD pattern

Got DBX Apr 25 Call at $2.96 when DBX was 24.94. I Tweeted earlier today that I was going long on DBX and posted a chart.

Stop = 21.00 just under C point.

Targets:

1.272AB=27.21

C+AB=D=29.08

1.618AB=29.80

Shooting for the 29.08 target. Using the stock price for risk/reward calculation:

Risk: 24.94-21.00=3.94

Reward: 29.08-24.94=4.14

R:R=1:1.05 no where near 1:2 but it appears to be a high probability trade.