Retail Stock Trades Near Bullish Trendline Before Earnings

A bullish ROST signal is flashing right before earnings

by Josh Selway

Published on May 23, 2019 at 2:34 PM

We're always digging through data from Schaeffer's Senior Quantitative Analyst Rocky White, and this week Ross Stores, Inc. (NASDAQ:ROST) popped up as a name to watch. Considering what's been happening in the retailer sector, we figured we'd take a closer look at ROST stock, especially since the company reports earnings after the close tonight.

Starting with White's data, the security has pulled back to the 200-day moving average, and the prior three signals of this type have all produced one-month gains, with an average rise of 12.7%. The stock was last seen trading at $94.22, so another move of this type would put it above $106 -- all-time high territory. Of course, an ugly turn in the earnings booth could render this technical data meaningless.

rost stock price may 23

An ugly outcome is exactly what Ross Stores gave bulls this time last year, when it fell 6.8% the day after earnings. Overall, it's moved 5.7% in post-earnings sessions during the past two years, and this time the options market is pricing in a 6.6% swing for Friday's trading. As for sentiment, bulls have been in control, based on the high levels of call buying seen in recent days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

Meanwhile, most analysts have handed out "strong buy" recommendations on ROST, though nine still have tepid "holds" on the books. And while short interest rose some in recent reporting periods, it still accounts for just 1.6% of the equity's total float.

From Schaeffer's Pro Traders
Trade Weekly Options Like a Pro

Direct from our Schaeffer's traders, your FREE guide to profiting with weeklies!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

Choosing the Right Online Broker
Click to continue to advertiser's site.
3 Penny Stocks Making Huge Moves Higher
Three stocks under $5 making notable moves
Analysts Slam CSX With Bear Notes After Earnings
CSX blamed trade conditions for its second-quarter earnings and revenue miss
Choosing the Right Online Broker
Click to continue to advertiser's site.