SFIX Tests Technical Resistance Ahead of Earnings

The stock's year-to-date breakeven is proving to be a stiff ceiling on the charts for SFIX

Digital Content Manager
Jun 5, 2020 at 2:41 PM
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The shares of online style service Stitch Fix Inc. (NASDAQ:SFIX) are up 1.4% at $25.50, ahead of the company's fiscal third-quarter earnings report, which is due out after the close on Monday, June 8. SFIX is pacing for a five-day win streak, though pressure at its year-to-date breakeven level is keeping this rally in check.

More broadly, SFIX has staged an impressive rally off its spring lows, steadily climbing back atop its early March bear gap with help from the supportive 10-day moving average. The equity has already doubled this quarter, though it's still looking at a 6% year-over-year deficit. 

A look back at SFIX's last eight post-earnings moves shows four negative returns, including a 25.2% dip in March and an eyebrow-raising 35.2% plummet back in October 2018. The security has averaged a 20.4% post-earnings swing, regardless of direction, during the past two years. This time around, the options pits are pricing in a slightly bigger move of 22.9%. 

Speaking of options pits, Stitch Fix's have been unusually bullish lately. This is per the security's 10-day call/put volume ratio of 6.86 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 86th percentile of its annual range. Conversely, short-term options traders have been much more put-biased, with SFIX's Schaeffer's open interest ratio (SOIR) of 1.12 sitting higher than 75% of readings from the past 12 months. 

A look at sentiment on Wall Street shows analysts split on SFIX. Of the 13 covering the tech name, seven say "strong buy," and six say "hold." Meanwhile, the consensus 12-month price target of $19.69 is a 22.7% discount to current levels. 

 

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