NTAP is technically overbought (RSI 74-75) but has bullish momentum; speaker takes a directional long position for ~1.5 months ahead of earnings.

what trends should we look out for in this chart from NetApp? The stock recently hit all-time highs, so we've seen a surge in some of these enterprise hybrid and public cloud companies.

where it has increased by more than 200% compared to its level 3 years ago. Most of its parabolic movement has occurred since that low in April. So, basically they're acting a lot like Picks and Shovels with this breakout.

HPE, NetApp, and then there's Everpure. They also have some other competitors here when it comes to storage systems. But Diane, it's a reflection of the sector as a whole that they're all exploding on the upside.

it's a lot closer to saying, " Hey, we've seen this bullish explosion recently." You have some revenue event movements where we've witnessed a big upward jump here.

I saw a large green candle, which immediately reversed. This serves as a good basis for the stock at around $194 per share.

So, there's a lot of support here, not just for NetApp, but for the overall sector. You see the momentum here. This is where things can get a little scary.

You are getting an upgrade on NetApp on a day when the RSI is at the 74-75 level. Anything above 70 on the RSI is considered overbought or oversold on a technical level.

Now, that does n't mean it can't go higher , but technically it's starting to expand a bit now.

If it starts to reverse at some point, maybe there could be some profit taking, or there could be some selling pressure due to the macroeconomics , which we are seeing today in the overall market going down a bit.

The one-year chart reflects a gain of over 100 percent in 2026, Perhaps this is a reflection of the regular calls we see from analysts for upgrades or price target increases. They wo n't release earnings reports until late November or early December.

So, I've taken into account that maybe I want to avoid that event risk , but I also want to take advantage of price changes until the income comes in, even if I avoid the event.

So, I'm looking at something a little bit longer term. I went for the November monthly option. Now, this is a high-value stock, right? So, using options can create leverage where you can take an directional trade.

For my example trade, I am looking at a bullish call vertical. If you think the stock will go up further in the next month and a half. I've moved on to the November monthly cycle.

There are 44 days left until the expiration date.

I will buy the at-the-money call with a strike price of 230. And conversely, I will sell the call with a strike price of 260. That is, a $30 bullish call vertical. I will pay a debit of approximately $10 for this.

So, my risk would be one-third of the width of the bullish call vertical , about $1,000 per spread, where it has the potential to stretch to $3,000 , right? 30 dollars. If it rises above the $260 price level.

If I pay that $10 debit , my break-even will increase to $240. This is about 4% above the current share price and I have 44 days to hold this position.

So, I gave myself enough time. I'm avoiding earnings event risk, but it's giving me an upside advantage on NetApp over the next month and a half, if you think it's going to go higher.

If you look at that $240 break-even, that would be a new all-time high for the stock if it moves above that. I think one of the key things about buying this type of directional biased vertical is that I have 44 days in this position.

Do I have to wait 44 days to close this trade ? No, not at all. If the stock price starts to rise and goes above break-even, this vertical price will start to increase.

This gives you the opportunity or option to close your position completely or partially before expiration. So, that gives you some flexibility here. If the level of implied volatility starts to rise, it could also increase it.

However, if you think that NetApp 's share price will increase, then this position must go in the direction of the price increase. Now, why did I choose this 260 strike to sell against my long 230 strike ?

The options market has set this price for a plus or minus movement to the upside for the November options series.