AVGO Earnings Setup – Overbought + “Sell the News” Risk

💥 AVGO Earnings Setup – Overbought + “Sell the News” Risk 🚨
📆 Earnings Date: June 5, 2025 (AMC)
🎯 Strategy: One-day event play using short-dated puts
🧠 Model Consensus Breakdown
Model Bias Strike Trade Type Confidence Notes
Grok/xAI 🟢 Bullish 262.5C Call 70% Sector momentum, IV high
Claude 🔴 Bearish 250P Put 65% Overbought RSI, max pain risk
Llama 🟢 Bullish 265C Call 80% Earnings momentum continues
Gemini 🔴 Bearish 242.5P Put 65% “Sell the news” scenario
DeepSeek 🔴 Bearish 237.5P Put 68% Institutional unwind

✅ Net Lean: Moderately Bearish (3 vs. 2)
📈 RSI > 80 across models → strong overbought condition
💣 Max Pain at $245 → gravity risk if earnings disappoint
📉 Elevated IV (75–85%) → IV crush post-earnings expected

🔎 Earnings Setup Snapshot
Current Price: ~$258.20

Historical Move (Earnings): ±5.9%

Implied Move (Straddle): ~6.15% → ~$16

Max Pain: $245

IV Rank: 0.75 → premiums rich

Overbought RSI: 82.6

✅ Recommended Trade Setup
Parameter Value
Instrument AVGO
Direction PUT (SHORT)
Strike 242.50
Expiry 2025-06-06
Entry Price $1.88 (ask)
Profit Target $4.70 (+150%)
Stop Loss $1.88 (full risk)
Position Size 1 contract (~3% risk)
Entry Timing pre-earnings close (6/5)
Exit Timing next-day open (6/6)
Confidence 67%

🧮 Breakeven: $240.62
🧠 Why this strike?

Inside expected move range

OTM → strong R:R

Low premium, defined risk

Aligned with bearish consensus

⚠️ Key Risks to Monitor
🔼 Strong beat + guidance → upside surprise

🌀 IV crush could outpace downside move

🟢 Broad market strength / sector rally