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Will Ulta Rally on Its Latest Earnings Report?


Take a look at a possible trade for the beauty retailer.

MINYANVILLE ORIGINAL Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) is a beauty retailer that provides cosmetics, salon products, and retail salon services. The company provides shampoos, conditioners, hair care accessories, and a variety of fragrances for both women and men. The company has a market cap of $6 billion. The stock is trading in a 52-week range of $51.64 - $98.42. The stock is currently trading at around $95.00. The stock is up 29.5% year to date and 70.65% in the past month.

Ulta is reporting earnings Thursday, September 6, after the close. Ulta reported earnings last quarter of $0.54 per share, beating estimates of $0.53 per share. The estimate for this report is $0.51. The stock has rallied on the past four earnings reports.

My Trade: Selling the Ulta Sep 40-39 Put Spread for $.40 Credit Bull Put Spread
Risk: $60 per 1 lot
Reward: $40 per 1 lot
Notes: I like this trade because the stock has rallied the last four times on earnings, and the stock looks great on the chart. The 20-, 50-, 100-day moving averages are all above $90 with the 150-day moving average at $89.63. If it breaks $89.60, which I do not think it will, it could test down to the measured move target of $84.62, the 200-DMA.

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