Virtualization-based cloud solutions specialist Vmware (VMW) is staging a technical breakout in Tuesday’s early going. Shares are up about 2.25% and narrowly above a classic handle pivot of 102.08 within a large weekly chart, corrective “W” base.

The action in VMW appears to be mostly benefitting from the broader market’s own attempt at tackling fresh highs, though shares did receive some analyst favor out of Goldman Sachs over the weekend. Analyst Heather Bellini suggested the name, along with peer Salesforce.com (CRM) could outperform the SP-500 (SPY) and other players in the niche computing space due to each one’s “defining” roles in one of the market’s latest tech revolutions.


 Figure 1: Vmware (VMW) Weekly Chart

Given our described bullish profile which also looks to be receiving some W5 weekly confirmation from Elliott Wave and its estimate for higher prices still to come in VMW over the next couple months, investors looking for long delta strategies might want to dig into its April or July options for ideas.

With decent liquidity for two-legged spreads and given the broader market’s slightly precarious testing with continued VIX ($VIX) alarm bells suggesting confidence has turned complacent near-term; the general observation is a slightly out-of-the money bull vertical which doesn’t necessarily reach for the clouds, might be a good place to start one’s research.

Chris Tyler
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.