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Equinix and F5 Networks Showing the Cloud Isn't Dead, Yet

Earlier this month, the cloud computing space got walloped off a revenue warning from $EQIX. That sent the stock from 105 to 70, and any name that had a cloud story was taken along with it-- VMW, CRM, AKAM, FFIV, and so on.

Well, earnings season is bringing some of these numbers to light, and while it still sucks for EQIX, it's not as bad for some of the others.  FFIV reported stellar numbers, and is seeing a great reaction premarket. However, if you looked at the past few earnings reactions, you'd see that this is par for the course in the name. The chart below shows the past 4 earnings reactions, from livevol.

As you can see, the past 4 gaps have been positive, and buying vol has been a decent play, assuming you exit quickly.

We should see sympathy moves in some of the other names today and through the rest of the week, although a break of their recent highs will be tough as sellers should come in at those prices.

If you want to learn how to trade earnings, check out my video course-- it will show you how to exploit patterns similar to FFIV so you can be confident in trading options around these events. Click here to see more.

by Steven Place

Steven Place is the founder and head trader at investingwithoptions.com/