Earnings Preview: Chevron Corporation, American Airlines Group Inc, and Mastercard Inc

Chevron Corporation (CVX), American Airlines Group Inc (AAL), and Mastercard Inc (MA) will report earnings tomorrow

Jan 28, 2016 at 1:47 PM

Earnings season is in full swing, with Wall Street today digesting results from social media giant Facebook Inc (NASDAQ:FB) and Dow component Caterpillar Inc. (NYSE:CAT). Looking ahead, fellow blue chip Chevron Corporation (NYSE:CVX) will report tomorrow morning, as will airline issue American Airlines Group Inc (NASDAQ:AAL) and credit card concern Mastercard Inc (NYSE:MA). Below, we'll take a pre-earnings look at CVX, AAL, and MA.

CVX is 2.4% higher at $85.25, thanks to rebounding oil prices. The stock has made progress since touching a five-year low of $69.58 in late August, but is staring up at its 10-month moving average -- which hasn't been toppled on a monthly closing basis since August 2014. Following its last eight turns in the earnings confessional, Chevron Corporation has averaged a one-day move of 2%. This time, the options market is pricing in a much bigger single-session move of 4.1%. Recent option buyers have been betting bearishly, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.71 stands higher than nearly three-quarters of all readings from the past year.

A rebound in oil has translated into selling pressure for fuel-dependent AAL, which is down 3.9% at $38.11. The shares have given up roughly 10% so far in 2016, and have been battling recent resistance at their formerly supportive 20-week moving average. American Airlines Group Inc has averaged a one-day swing of 3.9% following its last eight earnings reports, but options traders are pricing in a bigger move of 7.6% this time. Despite AAL's struggles, speculators on the ISE, CBOE, and PHLX have bought to open 2.3 calls for every put during the past two weeks, hinting at a bullish bias.

MA is 0.7% lower at $84.22, bringing its 2016 deficit to 13.5%. The shares have been in a long-term uptrend for years, but are poised to close beneath their 20-month moving average for the first time since August 2010. Unlike sector peer Visa Inc (NYSE:V) -- which reports tonight -- MA speculators have been scooping up long calls. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.02 is higher than two-thirds of all other readings from the past 12 months. Traders are pricing in a one-day post-earnings move of 6.2% for Mastercard Inc -- more than double the stock's average swing of 2.6% over the past eight quarters.

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