Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Nov 20, 2023 at 3:13 PM
  • Quantitative Analysis
Cloudflare Inc (NYSE:NET) is today trading at its highest level since early August, last seen up 0.3% at $72.94 at last glance. The security also sports a 61.7% year-to-date lead, and is pacing for its sixth daily gain over the last seven. With help from historically bullish signal now flashing, the equity could have just what it needs to keep charging higher, too.


NET Inraday

Digging deeper, Cloudflare stock's latest peak comes amid historically low implied volatility (IV). This has been a bullish combination in the past, according to Schaeffer's Quantitative Analyst Rocky White. White's data points to three other signals in the past five years when NET was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower.
This is currently the case with the stock's SVI of 45%, which stands in the 1st percentile of annual readings. The shares were higher one month later after each of those signals, averaging a 16.4% rise. From its current level, a move of similar magnitude would place NET above $48, or its highest level since February 2022.

A short squeeze could accelerate these gains. Short interest rose 4% in the most recent reporting period, and the 19.64 million shares sold short make up 6.7% of the security's available float. It would take shorts more than one week to cover their bearish bets, at NET's current pace of trading.

Published on Nov 20, 2023 at 2:16 PM
  • Most Active Weekly Options

The shares of Microsoft Corp (NASDAQ:MSFT) hit a fresh record high of $377.10 earlier today, now up 1.5% at $375.25 at last check. The stock has charged higher on the charts of late, fresh off its fourth-straight weekly win and above all moving averages between the 20- and 320-day trendlines, with the former providing support through October. 

MSFT Nov20

Microsoft stock is a staple amongst options traders, and the past two weeks have been no different amid its most recent run. According to Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume in the last 10 days, MSFT has seen 2,682,497 calls and 1,738,973 puts exchanged during this time. The most popular contract over this period was the November 375 call, followed by the 372.50 call in the same monthly series. 

MAO Nov20

These options traders are in luck at the moment, too. MSFT is seeing attractively priced premium at the moment, per its Schaeffer's Volatility Index (SVI) of 20%, which ranks in the low 10th percentile of its annual range. 

Published on Nov 20, 2023 at 12:25 PM
  • Intraday Option Activity
  • Earnings Preview

Options bulls have their eyes set on Best Buy Co Inc (NYSE:BBY) ahead of the retailer's third-quarter earnings report, due before tomorrow's open. Even with the holiday-shopping season's arrival, analysts expect a 6.5% year-over-year decrease in revenue to $9.8 billion, with earnings of $1.18 per share.

Despite the revenue expectations, bulls are placing their bets on Best Buy stock. The 16,000 calls traded so far today account for eight times the average intraday volume, though the 6,555 puts exchanged represents triple the amount typically seen by this point. The most popular contract is the weekly 12/1 70-strike call, followed by the weekly 11/24 62-strike put, with new positions opening at each. 

It's no surprise that call traders are making their moves, as BBY tended to close higher in the session after the retailer reported over the past eight quarters. In fact, the equity staged six next-day pops after its last eight quarterly reports, including gains of more than 3% following its last two earnings calls. In the last two years, Best Buy stock averaged a next-day gain of 5.8%, regardless of direction. This time around, the options market is pricing in a 9% swing.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), bullish bets were already popular. The shares sports a top-heavy 50-day call/put volume ratio of 1.15, which ranks in the highest percentile of its annual range. 

Ahead of the event, Best Buy stock was last seen 0.3% lower at $68.04. Despite adding 6.4% last week, the equity still faces pressure from its 60-day moving average that was overhead from February to May. Year to date, BBY is down 15.4%, though it sports a more modest 5.8% year-over-year deficit.

BBY Chart November 202023

Published on Nov 20, 2023 at 11:49 AM
  • Midday Market Check



Published on Nov 20, 2023 at 10:58 AM
  • Intraday Option Activity
  • Analyst Update

J.P. Morgan Securities chimed in on coffee and donuts this morning, flipping its ratings on two large chains. The brokerage upgraded Dutch Bros Inc (NYSE:BROS) to "overweight" from "neutral," and downgraded Krispy Kreme Inc (NASDAQ:DNUT) to "neutral" from "overweight," seeing DNUT's potential upside already factored in to its 23% year-to-date lead.

The firm also lifted BROS' price target to $35 from $30. At last glance, Dutch Bros stock was up 1.6% at $28.30, earlier as high as $29.01. Just shy of positive territory for 2023, the equity has found a solid line of support at the $27 mark, though its 200-day moving average lingers above as potential pressure. Meanwhile, options traders are targeting the security at double the amount typically seen at this point, with the January 2024 35-strike call seeing the most activity. 

At last look, DNUT was down 12% to trade at $12.79, though its 40-day moving average appears to be keeping losses in check. It's also worth noting that shorts have been building their positions, with short interest up 26% over the last month. The 13.83 million shares sold short account for a hefty 20.9% of the stock's available float, and would take nearly 13 days to cover, at Krispy Kreme stock's  average pace of trading. 



Published on Nov 20, 2023 at 10:50 AM
  • Buzz Stocks
  • Analyst Update

Zoom Video Communications Inc (NASDAQ:ZM) will step into the confessional after today's close to report third-quarter results. The equity is up 1.9% to trade at $65.31 at last check, with the brokerage bunch expecting the company to show a rise in quarterly revenue, and earnings of $1.08 per share.

Overhead pressure remains at the $66 level, as well as the stock's 60-day moving average. Today, the stock is eyeing its fourth gain in the last five sessions, though the shares carry a 19.8% year-over-year deficit. 

The security's history of post-earnings reactions is mostly negative. Zoom Video stock finished six of its last eight next-day sessions lower, including a 16.5% dip in May. The shares averaged a move of 7.4% during the past two years, regardless of direction, but now the options pits are pricing in a bigger-than-usual move of 7.4%.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 10-day call/put volume ratio of 4.30 that sits higher than 80% of annual readings. This suggests calls have been getting picked up at a much quicker-than-usual clip.

Drilling down to today's options activity, 9,504 calls have already crossed the tape, which is triple the intraday moving average volume, compared to 6,796 puts. The most popular contract is currently the weekly 11/24 60-strike put, followed by the 70 strike call in that series.

Published on Nov 20, 2023 at 9:55 AM
Updated on Nov 20, 2023 at 9:55 AM
  • Analyst Update
Published on Nov 20, 2023 at 9:10 AM
Updated on Nov 20, 2023 at 9:22 AM
  • Opening View

Stock futures are sluggish to start Thanksgiving week, as Wall Street looks to build on its three-straight weekly wins. Futures on the Dow Jones Industrial Average (DJIA) are down 28 points, while S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures hover just below fair value. Though the market will be closed on Thursday, and at 1 p.m. ET on Friday, there are still a handful of notable earnings reports this week. 

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

  • Options bulls eye surging healthcare stock
  • These retail stocks had a big week. 
  • Plus, BA upgraded; notes on coffee, donut chains; and DKNG's latest bull note. 

Futures Nov20

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw over 1.6 million call contracts and 918,777 puts traded Friday. The single-session equity put/call ratio fell to 0.54 and the 21-day moving average stayed at 0.69.
  2. Boeing Co (NYSE:BA) is up 1.5% premarket, after Deutsche Bank upgraded the blue-chip aerospace stock to "buy" from "hold," with a price-target hike to $270 from $204. Fresh off three-straight weekly wins, BA is up 9.2% in 2023. 
  3. Dutch Bros Inc (NYSE:BROS) stock is up 1.7% before the bell, after J.P. Morgan Securities upgraded the coffee chain to "overweight" from "neutral," while Krispy Kreme Inc (NASDAQ:DNUT) is down 1.8%, after the firm downgraded the donut stock to "neutral" from "overweight." Heading into today, BROS sports a 1.2% year-to-date deficit, while DNUT is up 26.4% since the start of the year. 
  4. DraftKings Inc (NASDAQ:DKNG) received a price-target hike from BTIG to $47 from $38. The stock is flat in electronic trading, but fresh off a two-year high last session. Since the start of the year, the sports betting stock is up 236.9%. 
  5. See what economic data is due out this week.  


China Leaves Rates Unchanged

Markets in Asia were mostly higher to start the week, after the People’s Bank of China (PBC) left its benchmark one- and five-year loan prime rates unchanged. In response, China’s Shanghai Composite added 0.5%, while Hong Kong’s Hang Seng led the gainers with a 1.9% pop, and South Korea’s Kospi tacked on 0.9%. Elsewhere, Japan’s Nikkei brushed 33-year highs at the beginning of the session, but ultimately closed 0.6% lower.

The major European bourses are mixed this afternoon, as the release of third-quarter corporate earnings slow down. What’s more, investors in the region continue to weigh the prospects of future interest rate moves. At last glance, Germany’s DAX and London’s FTSE are both down 0.4%, while France’s CAC 40 sports a marginal 0.06% lead.

Published on Nov 20, 2023 at 9:14 AM
  • Monday Morning Outlook
Published on Nov 17, 2023 at 4:26 PM
  • Market Recap

The S&P 500 and Nasdaq scored modest fourth-straight daily wins on Friday, while the Dow settled just above breakeven. All three major benchmarks saw a third consecutive week in the black, which hasn't happened for the Dow and S&P 500 since July, and for the Nasdaq since June. Softer-than-expected inflation data was a major driving force behind this week's rally, which brought forth the Cboe Volatility Index's (VIX) fourth-straight week in the red.

  • GitLab stock downgraded on risk-reward ratio.
  • Healthcare stock surges after big hospital sale.
  • Plus, more on the VIX's dismal week; GPS stages post-earnings surge; and a 0DTW options breakdown.

Closing Index Summary November 172023

NYSE and Nasdaq Stat November 172023

5 Things to Know Today

  1. Amazon.com (AMZN) began cutting “several hundred” jobs in its Alexa division, amid cost-cutting efforts that have been underway since last year. (CNBC)
  2. Millions of gig workers may be getting left out of U.S. employment reports, per research for the Boston Federal Reserve labor market conference. (Reuters)
  3. Behind the "fear gauge's" downward spiral this week.
  4. Gap stock attracted bullish attention post-earnings.
  5. Everything you need to know about 0DTE options

Earnings November 172023

Unusual Options Activity November 172023

Oil Prices Mark 4th-Straight Weekly Loss

Oil prices settled higher on Friday, amid reports that Saudi Arabia could extend its voluntary production cut into 2024. Plus, the Organization of the Petroleum Exporting Countries and their allies (OPEC+) could cut up to 1 million barrels per day. December-dated West Texas Intermediate (WTI) rose $2.99, or 4.1%, to close at $75.89 a barrel on the day. The commodity still marked a fourth consecutive weekly loss, though, shedding 1.7%.

Gold prices were lower, but still saw a 1.8% weekly win on the back of a weaker dollar and declining Treasury yields. December-dated gold shed $2.60, or 0.1%, to close at $1,984.70 an ounce for the day.

Published on Nov 17, 2023 at 1:03 PM
  • 5-Minute Market Rundown

The week kicked off on a sour note after Moody's Investors Services slashed its U.S. credit rating outlook to "negative," though the Dow Jones Industrial Average (DJI) managed to turn in a modest win on Monday. Upbeat inflation data helped the blue-chip index score its third-straight win, while falling Treasury yields boosted the S&P 500 (SPX) and Nasdaq Composite (IXIC). Wall Street's rally held strong midweek, as more positive inflation data rolled in to overshadow lackluster retail sales data.

All good things must come to an end though, and the DJI snapped its daily win streak, while the Cboe Volatility Index (VIX) eyed a fourth-consecutive weekly drop. As of Friday afternoon, all three benchmarks are modestly lower, yet still heading for solid weekly wins.

Retail Earnings to Unpack Before the Holidays

While reports are beginning to  taper off, retail earnings were in focus leading up to the holiday shopping season. Target (TGT) performed particularly well in the earnings confessional, surging after sharing an upbeat holiday quarter forecast. TJ Maxx parent TJX Companies (TJX) wasn't so lucky, forecasting a weaker-than-expected forecast for the same period as its retail sector peer.

Apparel retailer Gap (GPS) was bombarded with bull notes and options traders' attention after its quarterly report included earnings and revenue wins, while blue-chip home improvement retailer Home Depot (HD) also beat expectations.


A Lot to Pack in During the Holiday-Shortened Week

Thanksgiving is next week, meaning Wall Street will get a brief break. However, there's still plenty of earnings set for release, especially more major retail names, as well as the Federal Reserve's meeting minutes to digest. In the meantime, here's what to make of the VIX's recent losing streak, and why SPX bulls should be operating with caution, but not panic.

Published on Nov 17, 2023 at 11:45 AM
  • Midday Market Check



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