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

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