Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Apr 11, 2023 at 11:20 AM
  • Analyst Update
  • Buzz Stocks
Published on Apr 11, 2023 at 10:51 AM
  • Analyst Update

WW International Inc (NASDAQ:WW) stock is soaring today, after Goldman Sachs upgraded the WeightWatchers parent to "buy" from "neutral," with a price-target hike to $13 from $3.80.

The firm expects consumers to turn to the weight management company to help them navigate the "increasingly complex field of pharmaceutical solutions." Just last month, WW International entered the prescription weight loss business with its acquisition of Sequence, which offers users to access to appetite suppressing drugs such as Ozempic. 

The shares of WW International are up 45.6% at $6.00 at last glance, their highest level since last month's surge that preceded a correction back into penny stock territory. Today's bull gap has WW breaking above pressure at the $4.50 level. Year-to-date, the equity is up 55.7%. 

Of the seven analysts in coverage, two now carry a "buy" or better rating, while five still rate WW a "hold" or worse. Short interest has been building, however, and the 8.16  million shares sold short account for 15.4% of the stock's available float. 

The security's typically quiet options pits are bursting with bullish activity amid the surge. So far, 28,000 calls have been exchanged, which is 30 times the typical call volume seen at this point. The January 2024 15-strike call is the most active contract, with new positions being opened there. 

WW is sporting attractive premium at the moment, too, as per its Schaeffer's Volatility Index (SVI) of 84%, which sits in the low 12th percentile of its annual range. This means options traders are pricing in low volatility expectations at the moment. 


Published on Apr 11, 2023 at 10:18 AM
  • Buzz Stocks

CarMax Inc (KMX) stock soaring this morning, after the retailer posted better-than-expected earnings for the fiscal fourth quarter. The company's adjusted earnings of 44 cents per share nearly doubled analysts' expectations, while revenue came in lower than anticipated. 

Last seen up 9.8% to trade at $72.35, KMX is now up 17.5%year-to-date. The shares are on track for the best single-session gain since March 2020, and are trading at their highest level since Feb. 21. The stock's 200-day moving average, which served as a ceiling back in February, remains potential resistance above.

A short squeeze could fuel additional gains. Short interest fell in the most recent reporting period, yet the 23.07 million shares sold short represents 14.7% of the stock's available float. At KMX's average pace of trading, it would take over nine days to buy back these bearish bets.

Options traders are targeting KMX today, with volume running at 11 times the intraday amount and pacing for the top percentile of its annual range. So far, 11,000 calls and 10,000 puts have crossed the tape, with the weekly 4/14 75-strike call the most popular. 

Published on Apr 11, 2023 at 9:16 AM
Updated on Apr 11, 2023 at 9:26 AM
  • Opening View

Stock futures are muted ahead of tomorrow's key economic data, which could provide further insight into how the Federal Reserve might proceed with interest rates. At last check, futures on the Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite Index (NDX) are all hovering near fair market value. 

Continue reading for more on today's market, including:
  • Schaeffer's Senior V.P. of Research Todd Salamone says the SPX is stuck between support and resistance.
  • Options traders love this bank stock.
  • Plus, CarMax's earnings beat, and Goldman Sachs upgrades 2 stocks.

futures Chart April 112023

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1 million call contracts and 660,011 put contracts traded on Monday. The single-session equity put/call ratio fell to 0.63 and the 21-day moving average stayed at 0.78.
  2. CarMax, Inc (NYSE:KMX) stock is rallying ahead of the open, last seen up 5.8%. This comes after the used vehicle retailer saw fourth-quarter earnings that nearly doubled analysts' expectations. Should these gains hold, KMX could conquer the +10% year-to-date level.
  3. Shares of Whirlpool Corporation (NYSE:WHR) are 2.7% higher premarket, after Goldman Sachs issued an upgrade to "buy." The analyst in question said the appliance name is not only affordable, but could rally more than 20%. Year-over-year, WHR is down 25%.
  4. Goldman Sachs also upgraded WW International Inc (NASDAQ:WW) to "buy," helping shares add 26% in electronic trading. The brokerage said WW may triple in value thanks to "its new obesity drug on-ramp solution." In the last 12 months, WW is down 59%.
  5. There's no economic data scheduled for release today.

Buzz 0411

All Eyes on South Korea's Interest Rate Decision

Markets in Asia mostly rose on Tuesday, with all eyes on the Bank of Korea’s interest rate decision, as the country’s central bank held rates for the second consecutive time. Japan’s Nikkei added 1.1%, while Hong Kong’s Hang Seng and the South Korean Kospi rose 0.8% and 1.4%, respectively. China’s Shanghai Composite bucked the regional trend, shedding 0.1%.

European markets are also trending higher, with mining stocks leading the gains. London’s FTSE 100 is up 0.3% midday, while the French CAC 40 rises 0.8%, and the German DAX moves 0.3% higher.

Published on Apr 10, 2023 at 4:28 PM
  • Market Recap

Stocks closed Monday mixed, as the S&P 500 inched into the black while investors awaited Wednesday's onslaught of economic data that could indicate the chances of a recession. Meanwhile, the tech-heavy Nasdaq lagged today, and the Dow eked out a modest win. 

Continue reading for more on today's market, including:

  • Bearish trendline threatens PayPal stock.
  • Put traders cash in on banking giant.
  • Plus, popping semiconductor stock; rare downgrade to watch; options traders circle big-name finance stock.

Closing Indexes Summary April 10

NYSE and Nasdaq Stats April 10

 Things to Know Today 

  1. The latest in electric vehicle (EV) technology is coming out of Warren Buffett-backed Chinese EV name BYD. (CNBC)
  2. Following a blowout Easter opening for new hit film “The Super Mario Bros. Movie," AMC Entertainment (AMC) shares surged more than 30% in three days.(MarketWatch)
  3. Semiconductor enjoys boost after rival production cut.
  4. Rare downgrade just hit Block stock.
  5. Options traders circle this notable finance name.

There were no earnings of note today.

Unusual Options Activity April 10

Oil Shifts Back Below $80

U.S. oil prices moved back below the round $80 mark, as energy traders await the incoming economic data. For the session, May-dated crude fell 96 cents, or 1.2%, to close at $79.74 per barrel.

A strengthening U.S. dollar and "profit taking" sent gold futures lower. June-dated gold dropped $22.60 or 1.1%, to settle at $2,003.80 today.

Published on Apr 10, 2023 at 2:48 PM
  • Most Active Options Update
Published on Apr 10, 2023 at 2:43 PM
  • Trade Postmortem

Schaeffer's Expiration Week Countdown subscribers more than tripled their money with our suggested Charles Schwab Corp (NYSE:SCHW) April 54-strike put in three days. Below, let's dive into the telling points for this bearish bet, as well as how it played out so quickly. 

At the time of our recommendation on Sunday, April 2, SCHW was staging a bear pennant breakdown on the charts, and threatening to push below the $52 level. The shares were also pushing through a large put open interest (OI) level, with the weekly 4/6 48-strike put acting as a magnet. 

Short sellers were also piling on Charles Schwab stock, with short interest up nearly 41% in the most recent reporting period. The equity's Schaeffer's Volatility Scorecard (SVS) was also coming off its lowest level in years, a move that has typically preceded bearish price action. 

SCHW did in fact continue lower, allowing traders to collect the full 200% profit. The stock is now starting to rebound, last seen up 4.2% to trade at $51.42, though still sporting a 38.2% year-to-date deficit. 

SCHW April10


Published on Apr 10, 2023 at 1:06 PM
  • Quantitative Analysis

PayPal Holdings Inc (NASDAQ PYPL) has found a floor at the $72 level in recent weeks, and is holding onto a 4% year-to-date lead. However, the shares are 2% lower this afternoon to trade at $73.50, and trading near a historically bearish trendline that could add pressure in the coming weeks. 

More specifically, PayPal stock just came within one standard deviation of its 50-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, at least six similar signals have occurred in the past three years. PayPal stock turned negative one month later in 77% of those cases, averaging an 7.2% dip. From its current perch, a move of similar magnitude would put PYPL not only below the $72 area, but beneath $69 as well -- its lowest level since December.

PYPL Chart April 102023

An unwinding of analysts' optimism could add even more headwinds. Of the 31 in coverage, 23 rate the shares a "strong buy" or "buy." Plus, the 12-month average target price of $100.81 is a 36.4% premium to PYPL's current level of trading. This indicates that downgrades and/or price-target cuts are overdue.

Options look to be an attractive route to go. Specifically, PayPal stock’s Schaeffer's Volatility Index (SVI) of 35% ranks in the lowest percentile of the last 12 months. What's more, its Schaeffer's Volatility Scorecard (SVS) is incredibly low right now, sitting at 21 out of 100. In simpler terms, the security is a prime selling candidate. 

Published on Apr 10, 2023 at 11:57 AM
Updated on Apr 10, 2023 at 12:03 PM
  • Midday Market Check
Published on Apr 10, 2023 at 10:59 AM
  • Buzz Stocks
  • Analyst Upgrades

Cloud stock NetApp Inc (NASDAQ:NTAP) is up 3.4% at $65.11 at last glance, and earlier hit $65.75, after an upgrade from Stifel to "buy" from "hold." The firm cited several "potential positive catalysts," including workforce reduction, sales reorganization, lower component costs, and QLC-based, lower-cost flash arrays (the highest capacity of flash storage available). 

Trading at its highest level in a month, NTAP is up 8.6% year-to-date. The $60 level provided support for the security's most recent pullback, though its 150-day moving average is capping today's gains. 

Of the 24 analysts in coverage, 15 still carry a 'hold" or worse rating on NetApp stock. The 12-month consensus price target of $71.63 represents a 10% premium to current levels.


Published on Apr 10, 2023 at 10:48 AM
  • Intraday Option Activity
  • Buzz Stocks
Published on Apr 10, 2023 at 10:19 AM
  • Analyst Update

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