How Does Exxon Mobil Corporation (XOM) Look Ahead of Earnings

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Exxon Mobil Corporation (XOM) is a Texas based oil and natural gas producer and currently the largest oil and gas company in the world by total market capitalization. As of the time of this post (12:10PM CST), XOM is currently trading 86.91, down 0.77% on the day. The stock is continuing to press the 52 week lows just over 86.00 as crude oil futures continue their downward slide and weigh heavily on the stock prices of most related companies. XOM is scheduled to report earnings this coming Monday, 2/2/2015 before the market open.

Over the last eight quarters of earnings data available, XOM has traded with mixed results, moving higher and lower evenly, four out of eight sessions immediately following the EPS release. The average historical move during this same time period was 1.5%. Currently the options market is pricing in a slightly lower than average move of approximately 0.91% based on the current pricing of the at-the-money straddle. This would imply a directional move of about 0.80 in the underlying stock by next Friday’s weekly options expiration. On a technical basis, XOM continues to look extremely weak, well below the downward sloping Ichimoku Cloud and all relevant moving averages on a daily chart. The stock continues to lack any significant buying pressure, and looks to remain bearish in the near term as long as crude oil prices continue their extended decline. For these reasons, I am heavily leaning bearish this name going into earnings, and will be looking to establish a short position before this afternoon’s close.

Potential Trade: Buying the XOM Feb 6th Weekly 84.5-83.5 Put Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $84.20

Elizabeth Arden, Inc. (RDEN) Bearish Activity on OptionHacker A Hugely Profitable Trade

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Elizabeth Arden, Inc. (RDEN) is a Florida based consumer beauty line manufacturer and distributor most well known for their makeup and men’s and women’s fragrance products. As of the time of this post (9:40AM CST), RDEN is currently trading at 15.49, down 0.69% on the day. The stock is currently trading just a dollar off of the 52 week lows of 14.50 which printed in late October, and it continues to press to the downside after falling over 60% from the yearly highs in April.

RDEN sold off hard yesterday on some bearish unusual options activity that hit the tape near the open. A trader bought 4,971 RDEN Jun 15 puts for $1.35. As the stock sold off these puts ripped higher. This was the most profitable trade to hit the tape yesterday. The stock sold off from $16.82 to $15.39 during yesterdays session. The puts rallied as high as $1.85 on yesterdays session and traded as high as $1.90 during today session as the stock continued to sell off. Even though the market sold off hard yesterday OptionHacker still provided a great opportunity for profits in RDEN.

Will Amazon.com Inc. (AMZN) Deliver Poor Earnings?

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Amazon.com Inc. (AMZN) is a Seattle based e-commerce retailer and distributor, with additional market presence in online web services and digital content distribution. As of the time of this post (11:45 AM CST), AMZN is currently trading at 303.87, nearly flat on the day. The stock is currently trading firmly within the lower portion of its 52 week trading range of 284-406.25, and has remained in this relatively bearish consolidation area for most of the past year. The company is scheduled to report earnings today, 1/29/2015 after the market close.

Over the last eight quarters of earnings data available, AMZN has traded mostly bearishly, moving lower on five out eight sessions immediately following the EPS release. The average historical move during this same time period has been 7.9%, however it may be worth noting that AMZN has sold off after each of the last four consecutive earnings reports, posting an average move during this time period of -9.8%. Currently the options market is pricing in a slightly lower than average implied move of approximately 7.54% in the underlying stock based on the pricing of the at-the-money straddle, which would represent about a $23.00 change in the stock price by tomorrow’s weekly options expiration. On a technical basis, AMZN is currently trading below the downward sloping Ichimoku Cloud and between most of the relevant moving averages. In conjunction with AMZN’s recent tendency to sell off after earnings, I am definitely leaning bearish this name and will be looking to establish a short position before this afternoon’s report.

Potential Trade: Buying the AMZN Jan 30th Weekly 290-280 Put Spreads for $2.40
Risk: $240 per 1 lot
Reward: $760 per 1 lot
Breakeven: $287.60

Will Alibaba Group Holding Limited (BABA) Impress on Earnings?

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Alibaba Group Holding Limited (BABA) is the ADR for Chinese e-commerce conglomerate Alibaba Group, the largest e-commerce company in the world. At the time of this post (12:30PM CST), BABA is currently trading at 100.37, down 2.49% on the day. The stock is currently trading near the middle of its post-IPO trading range of 82.81-120.00 after the stock debuted on the NYSE in late September. BABA is scheduled to report earnings tomorrow, 1/29/2015 before the market open.

Last quarter’s earnings report was the first and only on BABA’s record, so while the data is limited, it can be noted that the stock traded higher immediately after last quarter’s EPS, making a move up of 4.2% in the session immediately following the data release. The options market is currently pricing in a larger move of about 7.31% following tomorrow’s announcement, which would represent nearly an equivalent dollar-value move in the stock by this Friday’s weekly options expiration. BABA is currently trading just inside the Ichimoku cloud on a daily chart, and is holding above key 100 level support after initially trading lower in today’s early session. With some of the recent momentum we’ve seen in technology names after earnings, and after witnessing the bullish investor reaction to last quarter’s BABA EPS release, I will be looking to establish a long position in this name going into this afternoon’s close.

Potential Trade: Buying the BABA Jan 30th Weekly 104-106 Call Spreads for $0.55
Risk: $55 per 1 lot
Reward: $145 per 1 lot
Breakeven: $104.55

Will Investors “Like” Facebook, Inc. (FB) Earnings

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Facebook, Inc. (FB) is a California based social networking and information technology provider. At the time of this post (11:45AM CST) FB is currently trading at 77.33, up 2.05% on the day on a generally strong trading session for techs thus far on the heels of Apple’s big earnings beat yesterday evening. FB is currently well within the upper portion of its 52 week trading range of 53.19-82.17, and the company is set to report earnings today, 1/28/2014 after the market close.

Over the last eight quarters of earnings data available, FB has traded mostly bullishly, moving higher on five out of eight sessions immediately following the EPS release. The average historical move during this same time period was 8.1%. Currently the options market is pricing in a slightly lower than usual implied move of approximately 7.07% based on the current pricing of the at-the-money straddle. This would represent an anticipated move of approximately $5.48 in the underlying stock by this Friday’s weekly options expiration. FB is currently trading well over the upward sloping Ichimoku cloud and most relevant moving averages on the daily chart, and has found strong buying support near the intraday lows near 76.00 which held today. As a result of FB’s tendency to trade higher immediately after earnings in conjunction with the current bullish technical setup, I will be leaning bullish this name and looking to establish a long position heading into today’s close.

Potential Trade: Buying the FB Jan 30th Weekly 81-83 Call Spreads for $0.50
Risk: $50 per 1 lot
Reward: $150 per 1 lot
Breakeven: $81.50

Will Yahoo! Inc. (YHOO) Slide on Earnings?

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Yahoo! Inc. (YHOO) is a California based information technology and digital content provider, well known for its eponymous search engine, and also for high-profile acquisitions of popular services such as Flickr and Tumblr. At the time of this post (12:30PM CST), YHOO is currently trading at 48.37, down 2.16%. YHOO has been unable to avoid the downward pull of the overall market this morning on a significant gap down along with the indexes, but the stock still remains just off its 52 week highs in a trading range of 32.15-52.62 for the year. YHOO is scheduled to report earnings today, 1/27/2015 after the market close.

Over the last eight quarters of earnings data available, YHOO has traded mostly bearishly, moving lower on five out of eight sessions immediately following the EPS release. The average historical move during this same time period was 4.9%. Currently the options market is pricing in almost double the historical average, reflecting an implied move of about 9.12% based on the current pricing of the at-the-money straddle. This would imply about a $4.40 move in the underlying stock by this Friday’s weekly options expiration. Although on a technical basis YHOO remains inside the upward sloping Ichimoku Cloud on a daily chart, the stock has been unable to rally and hold above the key 50.00 level resistance and has pulled back sharply off these levels so far in 2015. With questions abound regarding how Yahoo! will manage their stake in Chinese e-commerce giant Alibaba (also reporting earnings this Thursday), I remain skeptical of the company’s ability to appease investors, and in conjunction with YHOO’s propensity to sell off after earnings, I am leaning bearish this name going into today’s EPS report. I will be looking to establish a short position in YHOO going into today’s close.

Potential Trade: Buying the YHOO Jan 30th Weekly 45-44 Put Spreads for $0.25
Risk: $25 per 1 lot
Reward: $75 per 1 lot
BReakeven: $44.75

Post Holdings, Inc. (POST) Activity Hits OptionHacker and is a Huge Winner

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Post Holdings, Inc. (POST) is a St. Louis based consumer-food producer that distributes its products to grocery stores and other food retailers across the United States and Canada. As of the time of this post (10:15AM CST), POST is currently trading at 41.17, up 3.76% on the day. The stock is currently in the lower portion of its 52 week trading range of 30.94-60.63, but has rallied hard today after some unusual options buying activity hit the tape and was flagged by OptionHacker.

At approximately 9:12AM CST, OptionHacker detected and flagged a large block by of 2,500 contracts of the POST Mar ’15 45.0 strike calls. The calls were bought at the ask for 1.00, and went off at a time when the spread was extremely wide, indicating a trader looking to waste no time getting filled on this large order. The open interest in this strike was only 279 contracts going into the day, further confirming that this was an opening buy order looking to profit from continued upside in POST going into the March monthly options expiration. With an initial cash outlay of approximately $250,000 before commissions, this trader was rewarded almost immediately after his timely purchase, as POST rallied up through the 40.25 level, trading as high as 41.51 and pushing the price of these options up as high as $1.50. As OptionHacker detected this opening transaction before the stock rallied, we were able to trade a profitable position in POST alongside this large buyer, and will be watching the stock closely for further upside.

Trade: Trader bought 2,500 of the POST Mar 45 Calls for $1.00
Risk: $100 per 1 lot
Reward: Unlimited
Breakeven: $46.00

These calls traded as high as $1.50 today meaning a trader could have locked in profits of 50% in just over an hour.

Will Skyworks Solutions Inc. (SWKS) Continue It’s Bullish Earnings Record?

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Skyworks Solutions Inc. (SWKS) is a Massachusetts based circuit and semiconductor producer. As of the time of this post (9:45AM CST), SWKS is currently trading at 76.73, down 0.74% on the day. The stock continues to trade in an extremely strong uptrend, printing fresh highs off of this morning’s open around 78.00. The stock is up over 150% off the 52 week lows of 29.02 which printed near this time last year. SWKS is scheduled to report earnings today, 1/22/2015 after the market close.

Over the last eight quarters of earnings data available, SWKS has traded overwhelmingly bullishly, moving higher six out of eight sessions (and closing flat once) immediately following the EPS release. The average historical move during this same time period was approximately 7.0%. Currently the options market is pricing in a slightly larger than average implied move of about 8.31% based on the current pricing of the ATM straddle. This would imply a move of approximately 6.40 in the underlying stock by this Friday’s weekly options expiration. SWKS is currently well above the Ichimoku Cloud and all relevant moving averages on the daily chart, as it remains in a strong bullish uptrend as mentioned previously. In conjunction with the propensity of SWKS to trade higher after earnings, I will absolutely be leaning bullish this name and looking to establish a long position going into this afternoon’s close.

Potential Trade: Buying the SWKS Jan 23rd Weekly 80-82 Call Spreads for $0.60
Risk: $60 per 1 lot
Reward: $140 per 1 lot
Breakeven: $80.60

Will U.S. Bancorp (USB) Follow the Trend in Financials?

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U.S. Bancorp (USB) is a Minnesota based regional bank and financial services provider. At the time of this post (1:15PM CST), USB is currently trading at 41.02, down 1.20% on the day. The stock is currently well within the lower portion of its 52 week trading range of 38.10-46.10 following a sharp reversal and decline off the highs which printed in late December. USB is scheduled to report earnings tomorrow, 1/21/2015 before the opening bell.

Over the last eight quarters of earnings data available, USB has traded predominantly bearishly, moving lower on six out of eight sessions immediately following the EPS release. The average historical move during this same time period was approximately 1.3%. Currently the options market is pricing in an implied move of nearly double the historical average, or around 2.5% based on the current pricing of the at the money straddle. This would represent about a 1.00 change in the price of the underlying stock by this Friday’s weekly options expiration. USB is currently trading below the upward sloping Ichimoku Cloud and all relevant moving averages on a daily chart. Additionally, with USB’s heavy bearish lean following earnings six of the past eight quarters, coupled with the recent weakness in most of the other larger banks and financial stocks, I will be looking to get short USB going into this afternoon’s close.

Potential Trade: Buying the USB Jan 23rd Weekly 41-40 Put Spreads for $0.25
Risk: $25 per 1 lot
Reward: $75 per 1 lot
Breakeven: $40.75

Will Netflix, Inc. (NFLX) Sell Off on Earnings?

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Netflix, Inc. (NFLX) is a California based entertainment content provider that operates subscription-based services for both online digital streaming internationally and physical DVD delivery to customers within the United States. As of the time of this post (12:50PM CST), NFLX is currently trading at 343.10, up 1.71% on the day. The stock is currently well within the lower portion of its 52 week trading range of 299.50-489.29 where it has remained after share prices made a significant gap lower following last quarter’s earnings release. NFLX is set to report earnings today, 1/20/2015 after the market close.

Over the last eight quarters of earnings data available, NFLX has traded with mixed results, moving higher and lower equally, four out of eight sessions immediately following the EPS release. NFLX has been an extremely volatile mover over this same time period, with an average historical move of approximately 16.0%. Currently the options market is pricing in a slightly lower than average move of approximately 11.78% based on the price of the at the money straddle. This would represent about a 40.50 move in the price of the underlying stock by this Friday’s weekly options expiration. On a technical basis, NFLX remains well under the downward sloping Ichimoku Cloud and relevant moving averages on the daily chart. From a fundamental standpoint, Netflix faces continued competitive pressure from rival digital content providers such as Amazon’s Prime service, and Netflix’s membership growth will be closely scrutinized after disappointing numbers in this area last quarter preceded the precipitous drop in share prices. With a confluence of bearish factors in place for NFLX, I will be looking to establish a short position this name going into this afternoon’s earnings release.

Potential Trade: Buying the NFLX Jan 23rd Weekly 315-310 Put Spreads for $1.40
Risk: $140 per 1 lot
Reward: $360 per 1 lot
Breakeven: $313.60