Will Halliburton Company (HAL) Fall on Earnings?

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Halliburton Company (HAL) is a Houston based oil and gas exploration and production company. At the time of this post (9:50AM CST) HAL is currently trading at 38.80, up 3.94% on the day. The stock is currently just off of the lows of its 52 week trading range of 37.21-74.33. HAL has seen a steep decline in stock price since late July, as its high correlation to the deteriorating price of crude oil futures has weighed heavily on the company’s share value. HAL is scheduled to report earnings on Tuesday, 1/20/2015 before the opening bell.

Over the last eight quarter of earnings data available, HAL has traded relatively bullishly, moving higher on five out of eight sessions immediately following the EPS release. The average historical move over this same time period has been a relatively modest 2.7%. Currently, the options market is pricing in a slightly larger than average anticipated move of approximately 5.38% based on the price of the ATM straddle. This would represent about a 2.10 directional move in the price of the underlying stock by next Friday’s weekly options expiration. HAL is currently trading well below the downward sloping Ichimoku Cloud and all relevant moving averages on the daily chart, and continues to show little to no strength along with most oil and gas affiliated stock names. With seemingly no end in sight for the declining prices of crude oil, and weak earnings reactions emerging from throughout the sector, I will be leaning bearish HAL going into Tuesday’s earnings report, and looking to establish a short position going into today’s close.

Potential trade: Buying the HAL Jan 23rd Weekly 37.5-36.5 Put Spreads for $0.25
Risk: $25 per 1 lot
Reward: $75 per 1 lot
Breakeven: $37.25

Will The Goldman Sachs Group, Inc. (GS) Sell Off Like the Rest of the Banks?

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The Goldman Sachs Group, Inc. (GS) is a New York City based investment banking and financial management institution. At the time of this post (11:50AM CST), GS is currently trading at 178.55, down 0.93% on the day. The stock is currently within the middle portion of its 52 week trading range of 151.65-198.06, and has been in a relatively steady decline since the end of 2014 after failing a potential double top test over 195.00 on the daily chart. GS is set to report earnings tomorrow, 1/16/2015 before the opening bell.

Over the last eight quarters of earnings data available GS has traded mostly bearishly, moving lower on five out of eight sessions immediately following the EPS release. The average historical move during this time period was 2.0%. Currently the options market is pricing in approximately a 3.06% move in the stock by this Friday’s monthly options expiration, an implied move that would represent about a 5.50 change in the price of the stock. GS is currently trading well below the Ichimoku Cloud and all relevant moving averages on the daily chart, and has continued to fall alongside other big banks like WFC and JPM over the course of the last several weeks. This overall weakness in financials following earnings, coupled with Goldman Sachs’ recent tendency to trade lower after earnings has me leaning bearish this name, and I will be looking to establish a short position going into today’s close.

Potential Trade: Buying the GS Jan 177.5-175 Put Spreads for $0.60
Risk: $60 per 1 lot
Reward: $190 per 1 lot
Breakeven: $176.90

Will Weakness in Crude Send Schlumberger Limited (SLB) Lower on Earnings?

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Schlumberger Limited (SLB) is a Houston based information technology services provider with a focus on the oil and gas sector. At the time of this post (10:40AM CST), SLB is currently trading at 76.83, down 1.99% on the day. SLB is also currently continuing to press its recently formed 52 week lows of 75.60, well off the highs of 118.76 which printed in early July. The stock has been in a steep decline ever since, as its value has been correlated closely with the continued slide in the price of crude oil. SLB is scheduled to report earnings today, 1/15/2015 after the closing bell.

Over the last eight quarters of earnings data available, SLB has traded relatively bullishly, moving higher on five out of eight sessions immediately following the EPS release. The average historical move during this same time period was a modest 2.8%. The options market is currently pricing in a larger than average average move of approximately 5.03% based on the price of the ATM straddle. This would represent a change of around 2.90 in the stock by tomorrow’s monthly options expiration date. SLB continues to decline in price and remains well below the downward sloping Ichimoku Cloud on the daily chart. With seemingly no end in sight for declining prices in crude oil and a bearish technical setup in this name, I will certainly be leaning bearish SLB going into this afternoon’s earnings announcement.

What Will Earnings Hold for Bank of America Corporation (BAC)?

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Bank of America Corporation (BAC) is a Charlotte based banking and financial services provider that works with a spectral variety of end-customers ranging from retail bank users to corporations and institutional investors. As of this post (1:00PM CST) BAC is currently trading at 15.85, down 3.86% on the day. BAC is down with the broader market on the session, assisted by an earnings miss from JPMorgan Chase (JPM) and an in-line report from Wells Fargo (WFC) that was still met with a bearish reaction in early trading. BAC is trading near the middle of its 52 week range of 14.37-18.21, and the company is set to report earnings tomorrow, 1/15/2015 before the opening bell.

Over the last eight quarters of earnings data available, BAC 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 has been 3.0%. Currently the options market is pricing in approximately a 3.44% move, relatively in-line with historical expectations. This implied move would represent about a 0.55 change in the price of the underlying stock by this Friday’s monthly options expiration in the January contracts. BAC stock opened this morning with a significant gap lower and is now well below the Ichimoku cloud on the daily chart after hitting firm resistance near the 18.00 level in late December. In conjunction with JPMorgan’s earnings miss and the bearish reaction to Wells Fargo’s in-line report, I am certainly leaning bearish BAC going into tomorrow’s earnings announcement. I am looking to establish a short position in this name heading into today’s close.

Will Lennar Corp. (LEN) Fall On Earnings?

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Lennar Corp. (LEN) is a Miami based residential construction corporation and home builder. At the time of this post (9:00AM CST), LEN is currently trading at 45.67, down 1.32% on the day. LEN is down this morning with the broader market, but also fell significantly in yesterday’s session after fellow home builder KB Home (KBH) reported a significant fourth quarter earnings miss. KBH CEO Jeffrey Mezger also released commentary yesterday indicating that weaker than expected profit margins could prevail into the foreseeable future, plunging the stock down nearly 16% to two year lows. LEN still remains in the upper portion of its 52 week trading range of 35.74-48.52, and is scheduled to report earnings tomorrow, 1/15/2015 before the opening bell.

Over the last eight quarters of earnings data available, LEN has traded mostly bullishly following earnings, moving higher on five out of eight sessions immediately following the EPS release. The average historical move over this same time period was 3.2%. The options market is currently pricing in a slightly larger than average implied move of approximately 5.43% in the stock by this Friday’s monthly options expiration, which would represent roughly a $2.50 change in the price of the stock over the next three trading days. While LEN has traded fairly bullishly over the last eight quarters of earnings, following the comments out of KBH yesterday regarding softening demand and weaker than expected profit margins for the home builder, I will certainly be leaning bearish this name going into earnings. I will subsequently be looking to establish a short position in LEN before today’s close.

Potential Trade: Long LEN Jan 44-43 Put Spreads for $0.25
Risk: $25 per 1 lot
Reward: $75 per 1 lot
Breakeven: $43.75

Traders Chase Frontline Ltd. (FRO) Calls Higher for a Big OptionHacker Winner

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Frontline Ltd. (FRO) is a Bermuda based crude oil transport company, and the world’s largest oil shipper by fleet size. As of the time of this post (11:00AM CST) FRO is currently trading at 4.89, up 24.25% on the session. The stock is currently well within the upper portion of its 52 week trading range of 1.18-5.12 following today’s tremendous rally. The stock printed as high as 5.00 on today’s session, which has provided some key resistance for buyers on the daily chart.

Earlier this morning a trader came and bought 1,402 FRO Feb 5 Calls for $0.50. The stock ripped to session highs after this order hit and as the stock has moved higher traders continue to buy these calls as the stock moves higher. Shortly after these calls hit a trader came in and bought another block of 2,000 calls for $0.60, then a block of 1,090 calls for $0.75, and a final block of 982 calls for $0.85. This means that if a trader would have taken the first OptionHacker signal they potentially could have seen 70% returns in a matter of hours. Another absolute blowout winner!

Trade: Traded bought the FRO Feb 5 calls for $0.50
Risk: $50 per 1 lot
Reward: Unlimited
Breakeven: $5.50

Starting Off the Week With a Massive Winner in SAP SE (SAP)

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SAP SE (SAP) is a German based business enterprise software company that provides digital solutions to businesses across the size spectrum. At the time of this post, SAP is currently trading at 67.44, up 3.54% on the day. Despite today’s rally, the stock is firmly within the lower portion of its 52 week trading range of 64.10-83.79, though it has managed to hold the 65.00 support level on a daily chart.

Earlier this morning at approximately 8:42AM CST, OptionHacker detected and flagged some unusually bullish options activity that came across the tape in the January ’15 67.5 strike calls. A large block of 1,000 contracts was purchased at the ask of 0.35 against an open interest of just 576 contracts, so we can surmise confidently that this was an opening transaction to establish a long call position. Just moments after this large block-buy, trading in SAP was halted pending an earnings related news release. Upon resumption of trading, SAP shot up over 4% on positive news surrounding preliminary Q4 revenues, and the call options that were bought for 0.35 traded as high as 1.35, a nearly 300% gain in a matter of minutes. This trade was another massive winner that was detected before the news by OptionHacker.

Trade: Trader bought 1,000 SAP Jan 67.5 Calls for $0.35
Risk: $35 per 1 lot
Reward: Unlimited
Breakeven: $67.85

Bearish Activity in Deutsche Bank AG (DB) as Stock Hits New Lows

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Deutsche Bank AG (DB) is a Frankfurt, Germany based investment bank and international financial services provider. At the time of this post, DB is currently trading at 28.24, down 1.67% on the day. The stock again printed new 52 week lows at 28.00 earlier in today’s session at as it continues to barrel lower, down about 46% on the year off the highs near 52.00 which printed around this time last year.

Earlier this morning, OptionHacker detected and flagged some unusually large bearish options activity in DB. At approximately 10:02AM CST, 1,755 of the DB Feb ’15 25.0 strike puts hit the tape in an opening transaction. The buyer of these long puts lifted the offer for 0.40 per contract, and bought this large block against an open interest of just 585. As of this post, over 2,700 of these contracts have now traded on the day, most of them at the ask. It would appear that this activity flagged by OptionHacker would indicate that a trader is positioning for further downside movement in DB heading into next month’s option expiration on Feb 20th.

Trade: I bought the DB Feb 25 Puts for $0.40
Risk: $40 per 1 lot
Breakeven: $24.60

Will Bed Bath & Beyond Inc. (BBBY) Take a Bath On Earnings?

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Bed Bath & Beyond Inc. (BBBY) is a New Jersey based consumer home goods retailer that operates over 1,500 brick-and-mortar store locations across the United States, Puerto Rico and Canada. At the time of this post (10:30AM CST), BBBY is currently trading at 79.36, up 1.48% on the day. The stock remains in a steep uptrend and hit new 52 week highs on the session, raising the highs on its 52 week trading range to 79.51 against lows of 54.96 which printed in late June. BBBY is set to report earnings today, 1/8/2015 after the market close.

Over the last eight quarters of earnings data available, BBBY has traded mostly bearishly, moving lower on five out of eight sessions immediately following the EPS release. Historical volatility over this time period has been 5.8%, though the options market is currently pricing in a slightly larger implied move of around 6.29% based on the current price of the expiring weekly ATM straddle. This implied directional move would represent approximately a $5.00 change in the price of the underlying stock by tomorrow’s weekly options expiration. Although BBBY is currently trading well over the Ichimoku Cloud on the daily chart, the stock has potentially become over-extended, and coupled with its propensity to trade lower following earnings releases, I will be leaning bearish this name going into this afternoon’s EPS report.

Potential Trade: Buying the BBBY Jan 9th Weekly 77-75 Put Spreads for $0.50
Risk: $50 per 1 lot
Reward: $150 per 1 lot
Breakeven: $76.50

Another Massive Winner on OptionHacker in Dupont E I De Nemours & Co (DD)

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Dupont E I De Nemours & Co (DD) is an industrial conglomerate with operation in the agriculture, electronics, materials, and pharmaceuticals spaces. The company’s stock is currently trading around $73.71 in a 52 week range of $59.35-$75.82. The stock has been performing relatively well with shares rallying 16.7% over the past 12 months. On the back of this strong performance traders have been picking up bullish options positions this morning as the stock continues to rally on the day.

Earlier today a trader bought 4,496 DD Jan 23rd weekly 74.5 Calls for $0.79. This order hit OptionHacker at 8:48 CT as the stock was trading at $73.22. The stock has now traded as high as $74.17 on the day and these calls have seen a nice move higher with the stock. These calls have already traded as high as $1.29 on the trading day making this an extremely profitable trade. Our head trader bought these calls and has already taken multiple profit targets.

Trade: Bought 100 DD Jan 23rd weekly 74.5 Calls for $0.91
Risk: $91 per 1 lot
Reward: Unlimited
Breakeven: $75.41

Profit targets have already been taken as high as $1.35 on these calls making this trade an HUGE winner.