Adobe has lost their moat to free software. Soon, headlines and analysts will start to add this to their ratings and ADBE will take a heavy hit. Here are fast facts on why I am doing this play and what my strategy is:
- Adobe's software monopoly was cloned as open-source software. This software started off buggy and broken, but is progressing at a rapid pace with roughly 60% parity today and new scorecards tracking progress on releases
- There are daily Youtube videos being put out tracking the software's progress with the latest versions, including 0.10.0 that released this weekend
- New releases are occurring every 2-3 days
- The core features have been developed and now critical errors are being addressed that will deliver on customer expectations
- When ArtCraft parity is reached soon, the developers already have historical precedent for spreading awareness via media campaigns and will likely do this again very soon when thresholds are met
- ADBE is already pushing an overbought RSI(14) signaling a necessary retreat from current prices
- ADBE has already hit $190 lows before on AI fears and now those fears are realized, regardless of how AI stocks play
- ADBE as an AI inverse or safe haven won't work when moat collapse sinks in for insiders and Wall Street
- Midterms will likely get Democrat votes which will pull the market down leading up to the election and following the midterms
HOW AM I PLAYING IT?
- Buying puts when price increases in the mornings
- Selling off positions expiring soon when price drops
- Buying a few hedge calls overnight as the price seems to only spike at morning bell and then fall or stay flat through the days
- Targeting early/mid November as range for bad headlines and news sell-offs. Will rotate positions at about 1-2 weeks out to defend against losses
OTHER MATERIAL
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