Adobe Stock Muted Ahead of Earnings

Adobe stock has a mixed history of post-earnings reactions

Assistant Editor
Jun 17, 2021 at 12:45 PM
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Software name Adobe Inc (NASDAQ:ADBE) is up 0.7% at $547.34 at last check, as it gears up for its fiscal second-quarter earnings report, which is slated to take place after the close today. Below we will dig into ADBE's technical setup, and how the equity has fared after earnings in the past.

Adobe stock started carving out a channel of highs earlier this month to notch a June 14 record of $561.36. Though shares cooled off slightly in the following sessions, ADBE still has the support of the 10-day moving average, and sports a 32.4% year-over-year lead.

ADBE 10 Day

Meanwhile, there's a heavy preference for puts in the options pits, suggesting a shift in sentiment could send the security higher. This is per ADBE's 50-day put/call volume ratio of 1.16 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 94% of readings in its 12-month range.

Short-term options traders have also been more put-biased than usual. This is per the ADBE's Schaeffer's put/call open interest ratio (SOIR) of 1.20, which stands in the 65th percentile of readings from the past year. 

A quick glance at Adobe stock's last eight post-earnings moves shows the stock could go in either direction, as four of those next-day sessions were positive -- including a 17.7% pop in March 2020 --  while four were negative. Additionally, the stock averaged a post-earnings swing of 5.1% in the past two years, regardless of direction/ This is slightly  bigger than the 3.6% swing the options pits are pricing in this time around. 

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