China's TAL Stock Flashes Buy Before Earnings

TAL Education has a history of volatile post-earnings moves

Apr 18, 2019 at 1:58 PM
facebook X logo linkedin


Among the more under-covered names reporting earnings next week is China-based TAL Education Group (NYSE:TAL). The company, which focuses on educational technology services, reports earnings before the open next Thursday, April 25. The event is notable due to TAL stock's post-earnings volatility from recent quarters -- and it doesn't hurt that the shares just flashed a historic buy signal.

By the numbers, the shares have posted four double-digit percentage moves the day after earnings in the past two years. On average, TAL has moved 8.7% after earnings.

While the Schaeffer's put/call open interest ratio (SOIR) is sure to change some next week after the expiration of April options today, the current reading of 3.68 is still quite notable, especially when you consider it ranks in the 94th annual percentile, and that much of this open interest resides outside the April series. For instance, the May 30 put holds a significant 9,712 contracts, and there are 5,214 options at the May 32 put. 

From a broader view, the security has shown a strong consistency to make moves bigger than the options market has priced in. This is evidenced by the Schaeffer's Volatility Scorecard (SVS) of 86 out of 100, which is good news for premium buyers.

TAL shares are currently in an interesting spot on the charts, too. At $33.85, they just fell below a 50% Fibonacci retracement of the decline from the 52-week high to 52-week low. This comes after the 61.8% Fibonacci retracement level acted as stiff resistance recently.

However, TAL is now within one standard deviation of its 70-day moving average, after a lengthy stretch above this trendline. Over the past three years, there have been seven similar pullbacks to this moving average, after which TAL was higher three weeks later 86% of the time, with an average gain of 7.43%, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

tal stock chart

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI