After Earnings: 3 Stocks, 3 Setups, 3 Different Trading Strategies

The market continues to trade near record highs, but I’m still cautiously bullish in the short term. Strong earnings are creating opportunities, but not every stock should be traded the same way. Three names recently caught my attention after earnings: Salesforce (CRM), Dollar General (DG), and HP (HPQ).

Each has a different chart, a different fundamental story, and a different trading setup.

Salesforce jumped sharply after earnings, with investors reacting positively to strong revenue growth and continued momentum in the company’s AI-related products.

The bigger technical story is that CRM recently moved back above its 200-day moving average after spending an extended period below it. That could signal a meaningful shift in the longer-term trend.

But after such a large earnings move, I don’t necessarily want to chase the stock with an expensive call option.

Instead, I prefer a bull put spread.

The idea is simple: structure the trade so CRM doesn’t necessarily have to keep soaring. If the stock moves higher, trades sideways, or even pulls back modestly while holding support, the trade can still work.

That gives me more flexibility after a big earnings gap.

Dollar General is interesting because it may benefit from continued pressure on the consumer.

When inflation and higher everyday expenses squeeze household budgets, consumers often become more selective about where they shop. Discount retailers can benefit from that shift.

Dollar General recently reported improving sales, same-store sales, and customer traffic, which gives the fundamental story some support.

Technically, the chart is also improving.

DG appears to be forming an inverse head-and-shoulders pattern, and the stock recently moved back above its 200-day moving average following earnings.

If that breakout holds, I believe the stock could have room to move higher.

For this setup, I prefer a longer-dated call option because I want to give the stock enough time for the pattern to develop rather than needing an immediate move.

HP was the one stock of the three that moved lower after earnings.

The company reported solid revenue, but investors focused on weakness in PC unit volumes and concerns around higher memory costs.

Still, there may be a longer-term opportunity here.

Consumers and businesses can delay upgrading computers, but eventually those upgrades have to happen. As AI applications demand more computing power, that replacement cycle could eventually work in HP’s favor.

From a technical perspective, the stock pulled back toward its 50-day moving average, which is the level I’m watching closely.

As long as that support holds, I’m willing to give the setup time.

For HP, I prefer a longer-dated call option that gives the stock several months to recover.

The key is knowing where I’m wrong. If HP decisively breaks below the 50-day moving average, that would weaken the setup and give me a reason to exit.

These three stocks are a great example of why there is no single options strategy that works for every situation.

CRM made a huge move, so I want a strategy that gives me room for the stock to cool off.

Dollar General has improving fundamentals and a potentially bullish chart pattern, so I’m willing to give the trade more time.

HP is pulling back into support, so the opportunity is about managing risk around a clearly defined technical level.

The stock is only one part of the trade.

You also have to consider the chart, the fundamentals, time, option pricing, and most importantly, where you will admit that your thesis is wrong.

That’s what separates simply buying options from building an actual trading plan.

Trading stocks and options involves real risk, including the possibility of losing some or all of the capital invested. These examples are for educational purposes only and should not be considered personalized financial advice.