EARN25

Options Traders Eye Fastenal Stock Ahead of Earnings

FAST stock gapped lower after its last earnings report

Managing Editor
Jul 11, 2017 at 1:47 PM
facebook X logo linkedin


Industrial machinery specialist Fastenal Company (NASDAQ:FAST) is set to report second-quarter earnings tomorrow, and investors are keeping their eye trained on the construction name, which has an underwhelming history in the earnings spotlight. In addition, FAST stock received a price-target cut from Wells Fargo today, to $47 from $51. Below, we will take a look at Fastenal stock's performance on the charts, and how FAST options traders are speculating ahead of tomorrow's earnings release. 

Fastenal shares are currently down 0.8% to trade at $43.53, and have endured a rough stretch the last few months. Since shooting to a three-year high of $52.74 on April 5, the stock has dropped 13%, primarily due to a post-earnings bear gap in mid-April. Fastenal has notoriously underperformed the day after reporting earnings, undergoing a drop in the subsequent session seven out of the last eight times. However, from a longer-term perspective, FAST stock has been in a channel of higher lows and highs since 2015.

170711fast

Digging into the options pits, FAST options volume is currently running at nine times the average intraday clip, with roughly 7,300 puts and 2,600 calls exchanged. In fact, Fastenal put volume is on pace for an annual high. Unsurprisingly, FAST's 30-day at-the-money implied volatility hit a 52-week peak earlier, as volatility expectations mount ahead of the earnings release tomorrow.

Short sellers are gearing up for another post-earnings slide for FAST stock. Short interest jumped 9.5% in the most recent reporting period, and now accounts for nearly seven sessions' worth of pent-up buying demand, at Fastenal shares' average daily trading volume.

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!