Stitch Fix Inc (NASDAQ:SFIX) is preparing to report earnings after the close on Monday, March 11, and that's notable since the company's last three earnings releases have sparked at least a 20.9% single-day swing in the stock price. Including all five earnings releases in the company's history, SFIX has averaged an after-earnings move of 19.2%. The options market is pricing in another huge move this time around, too, expecting an almost 22% move from SFIX for Tuesday's trading.
Meanwhile, sentiment in the options pits seems relatively normal ahead of earnings. That is, the 10-day call/put volume ratio of 2.68 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the middling 55th annual percentile.
Some of this consistent call buying is probably linked to the extremely high short interest levels on Stitch Fix. In fact, short interest accounts for almost 36% of the total float, and if you go by average daily trading volumes, it would take short sellers almost three weeks to cover their positions.
At last check, the AI-powered styling platform was trading down 4.8% at $25.27, moving away from the 200-day moving average and falling below the recently supportive 20-day moving average. All of this is taking place near the site of SFIX's December bear gap, setting up a formidable area of technical resistance.
