Texas Instrument (NYSE: TXN)

Market sentiment: Bullish

Texas instruments shares bounced off a three year low on Thursday, when its biggest customer, Nokia Corp., gave an upbeat second-quarter report. Company expects earnings in a range of 43 cents to 47 cents per share and £3.33 billion to £3.46 billion in revenue.
If this stock won’t go much further down then this could be a good time to do bullish hedge trade for TXN. Even if in a yearly chart pattern,this stock looks bearish but in mid-term period this looks bullish. The reasons are:

• Saucer-shaped bottom has formed in past eleven trading days and neck line has broken
• RSI (14,70,30,close) is 52 which reflects buyers are in control ,CCI (14,100,-100) is 157.
• Positive divergence has formed by both RSI and CCI
• Lower pitchfork has given support and price is hovering near middle pitchfork. Middle pitchfork could work as both support and resistance

Considering above technical and fundamentals, we could do August bull-put credit spread below the $25 range. This trade will make 5.6% return in just 4 weeks as long as TXN is above $25 at August expiration. This trade could be risky if company’s earnings disappoint, but even though it happens, this position could be protected by support at $27.