Before ER Options 3/14–3/18/16
March 12, 2016
This week’s before ER list is comprised of a few different companies from a few industries and market caps. Big gainers expected are $ORCL, $FDX, $ADBE, and $TIF.
Calls are the dominant suggestion going into next week. Last week was very bullish with the market up overall, and surprisingly gold and oil were also up.
$DDD Puts have been slow and steady gainers. The stock value has fallen the past week despite a bullish market as traders expect a miss from ER. The company has a mix of ER results the past 8 quarters so the sentiment may be true.
$QIHU has a history of beating ER expectations. The past six months have been an uptrend for the stock. Stock value is not at its high but still shows bullish on the 5-year chart.
$JASO has beat ER expectations the past three quarters but has a mixed history before then. The company has its lowest reporting in Qtr 1 and then gradually rises in revenue and earnings to Qtr 4. This is the Qtr 4 ER. JASO has been flat the past two and half years trading within $8-$11. Option volume isn’t very high so trade small. A chart analysis can tell option volume is low by the weak details in indicators.
$ORCL has a history of missing expectations. The recent market surge has helped this stock move up in value. The news is full of “will Oracle bear this ER expectation?” The market was bullish 3/10/16 and Call traders doubled their trade into 3/11/16.
$FDX Calls have had plenty of opportunities for gains. In the past five days three jumps have occurred. The company has a mixed history of beating ER expectations. Rising fuel prices won’t help the bottom line. Analysts have been recently downgrading their opinions on the stock value.
$WSM has a mixed history of beating ER expectations, and alternates between beat and miss the past 8 quarters. This is the miss ER to complete the pattern. It’s recently been on an uptrend with the market bullishness, and Call traders have had a few opportunities for gains.
$ADBE has a history of beating ER expectations. It’s risen sooner and faster then other suggestions this week, but has had a recent dip that the stock seems to be bouncing from. Calls have been a day trader’s dream with daily opportunities for gains.
$MIK has been in the market the past two years and has offered two rises overall in stock value. It’s on a recent uptrend. The company has a mixed history of ER beats. The only reason this is a suggestion this week is it has a late in the week ER and open interest is pretty high for the $25 Calls. Watch option volume for liquidity before trading.
$TIF reports last on Friday, 3/18/16. Its been in its largest downtrend in five years but recently bouncing with market bullishness. This could be a dip opportunity for longer term options. The company has a mixed history of beating ERs. TIF is still the industry leader with solid dividends history.
Here are a few charts of $SPY, $USO, and $GLD which represent high volume ETFs with high volume options. I like to use these as gauges for the market.
$SPY has been bullish since mid-February. It’s still to be seen if six month highs can be defeated at the $210 range. Indicators are bullish and resistance could be tested within the week if the pps uptrend continues.
$USO has been on a nice uptrend since oil prices have recovered above $35/barrel. Chart indicators indicate buy. I’m watching CCI as it trends in the overbought zone. A CCI dip below 100 would signal a loss in bullish steam.
$GLD has been very bullish this year. Its been surprisingly uptrending even as the market recovered the past couple of weeks. The chart analysis shows a weakening uptrend though. A big red candle in Friday, 3/11/16, trading coiled with falling CCI sand MACD are early signs of a sell signal. -DM is starting to rise. Watch for profit taking this week if stocks continue to be bullish.
Please read my ER strategy post to understand this trading strategy before utilizing.