Trade of the Day: Goodyear Tire & Rubber Co (NASDAQ:GT)

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Although earnings season is still a few days away, it is always good to look ahead and do some early homework. I normally don’t take too many earnings trades, and I intend to be out of the following Goodyear Tire & Rubber Co (NASDAQ:GT) trade well ahead of its announcement, which is due to be released the last week of October.

Goodyear has beaten expectations during the past four quarters by $0.13, $0.01, $0.18 and $0.02, respectively. But, while I like the fundamental setup for the company, the technical setup on the stock is what attracted me to play this bullish call option:

Buy to open the GT October 33 calls (GT161021C00033000) for a maximum price of $0.80.

Wednesday’s high tapped $32.97. Resistance is at $32.75–$33. Support is at $32.25–$32. I would like to see shares rally to the mid-$30s ahead of GT’s earnings announcement. This would ensure a triple-digit return for our trade, as the GT October 33 calls would be at least $2 in the money if shares clear $35 by Oct. 21.

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