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We’ve opened a bullish trade on Under Armour Inc (NYSE:UA) as the stock breaks beyond resistance. This trade is a bit of a piggyback off of the upgrade Nike Inc (NYSE:NKE) got from JPMorgan before its earnings report today. In that case, NKE is also breaking above resistance and completing a bullish, inverted “head-and-shoulders” pattern. However, implied volatility on NKE is extremely elevated, and buying around an earnings report is probably not a good idea in the current market environment.

We recommend Under Armour as an alternative. However, we will be watching this trade very carefully. Although the trend and fundamentals look good, the market still looks a bit edgy as the S&P 500 inches up into its consolidation range from last year.

‘Buy to open’ the Under Armour April 86 Calls (UA160415C00086000) for a maximum price of $3.00.

We may be recommending a quick exit in this Under Armour trade if the trend shows signs of slowing.

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news.

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