Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Nov 21, 2023 at 11:54 AM
Updated on Nov 21, 2023 at 11:55 AM
  • Midday Market Check



Published on Nov 21, 2023 at 11:04 AM
  • Buzz Stocks
  • Analyst Update

The tech sector is in focus today, following reports that former OpenAI CEO Sam Altman could lead Microsoft's (MSFT) new artificial intelligence (AI) research team. Also seeing attention is C3.ai Inc (NYSE:AI), after the company cut jobs due to performance and to save costs.

To follow, Oppenheimer upgraded C3.ai stock to "outperform" from "perform" this morning, citing the company's AI strength, accelerating growth, and margin expansion. Still, 11 of the 14 analysts in coverage rate the stock a "hold" or worse, indicating there is still room for additional upgrades.

The shares are up 2.9% to trade at $28.84 at last check, though the $32 region has remained as pressure since August. Support is holding steady at the 40-day moving average, and so far this year C3.ai stock has amassed an impressive 161.3% lead.

Options volume is running at four times the intraday average amount, with 57,000 calls and 22,000 puts traded so far today. Most popular is the 11/24 30-strike call, where new positions are being opened.

These options traders are in luck, as the security is currently seeing better-priced premiums than usual. This is per its Schaeffer's Volatility Index (SVI) of 97%, which sits in the low 19th percentile of its annual range. 

Published on Nov 21, 2023 at 10:48 AM
  • Buzz Stocks

Of the flood of retail earnings released ahead of the open this morning, American Eagle Outfitters Inc (NYSE:AEO) and Dick's Sporting Goods Inc (NYSE:DKS) are making two of the most notable post-earnings swings. 

At last glance, AEO was down 16.9% at $16.42, despite its better-than-expected third-quarter results and upbeat annual revenue forecast, after the company's current-quarter operating income forecast missed estimates. Today's bear gap has American Eagle stock firmly removing itself from its Nov. 17 52-week high of $20.21, and on track for its worst single-session drop since April 2020. While DKS is still up 18% year-to-date, keep an eye on the shares' 100-day moving average, a trendline that is getting tested today for the first time since July. 

On the other hand, Dick's Sporting Goods stock was up 11.2% at $132.36 at last check, on track for its best single-session pop since March 7.   The company beat third-quarter profit estimates and raised its 2023 guidance, noting a "very strong" back-to-school season and excitement about holiday shopping. DKS has recovered a good portion of its late-August post-earnings bear gap of 24%, but is still a long way from its pre-earnings August close of $147.04. The silver lining; the shares are now back above their year-to-date breakeven level. 

Naturally, both stocks are seeing a surge in options activity. So far, AEO has seen 8,144 calls and 4,196 puts exchanged, which is already 2.8 times the average daily options volume. The weekly 11/24 16.50-strike call is the most active contract, where new positions are being opened. 

DKS has seen 14,000 calls and 6,339 puts across the tape so far, which is three times the average daily options volume. The weekly 11/24 135-strike call is the most popular, followed by the 130-strike call in the same series, with new positions being opened at both. 

Published on Nov 21, 2023 at 10:18 AM
  • Intraday Option Activity
  • Buzz Stocks

The shares of Kohl's Corporation (NYSE:KSS) are 12.2% lower at $21.82, after the retailer reported a bigger-than-expected drop in sales for the third quarter, as shoppers were pressured by high inflation. Same-store sales were lower too, also coming in well below forecasts and leading Kohl's to lower its full year same-store sales outlook to the low end. 

Bearish options traders are targeting KSS after the news, with 11,000 puts crossing the tape so far -- nine times the intraday average amount -- while 9,700 calls have also exchanged hands. The weekly 11/24 20-strike put is the most popular contract, followed by the 24.50-strike put from the same series. 

Now on the short sale restricted (SSR) list, short interest is up 8% over the last two reporting periods. Still, the 25.73 million shares sold short represent 23.7% of Kohl's stock's available float. 

On the charts, KSS' 60-day moving average is keeping today's pullback in check, though its still pacing for its biggest single-day percentage loss since July 2022. While the equity is  up 7.8% this quarter, it's now down down 10.5% year to date.

Published on Nov 21, 2023 at 9:01 AM
Updated on Nov 21, 2023 at 9:58 AM
  • Opening View

Investors are unpacking a slew of retail earnings this morning, ahead of this week's Black Friday sales, while also awaiting the Federal Reserve's latest meeting minutes, due out at 2 p.m. ET. Ahead of the event, Wall Street is looking at a potential breather from its recent rally, with stock futures modestly lower ahead of the open. 

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

  • Pessimism could fuel more gains on Wall Street, per Schaeffer's V.P. of Research Todd Salamone. 
  • Outperforming cloud stock flashing historically bullish signal. 
  • Plus, 2 stocks falling after earnings; and GEN jumps on bull note. 

futures nov21

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw over 1.3 million call contracts and 717,829 puts traded Monday. The single-session equity put/call ratio fell to 0.53 and the 21-day moving average stayed at 0.69.
  2. Lowe's Companies Inc (NYSE:LOW) is down 4.1% premarket, after the company slashed its full-year sales forecast due to weak demand. Should these losses hold, LOW will slip into negative territory for the year. 
  3. American Eagle Outfitters Inc (NYSE:AEO) is down 15.5% before the bell, despite the retailer's better-than-expected third-quarter results and upbeat profit forecast. Looking to plummet further from its recent Nov. 17 52-week high of $20.21, the equity is down 41.5% heading into today. 
  4. Gen Digital Inc (NASDAQ:GEN) is up 4.9% in electronic trading, after Morgan Stanley upgraded the stock to "overweight" from "equal weight," with a price-target hike to $26 from $23. On track for its sixth-straight daily win, GEN is looking to break into positive territory in 2023. 
  5. See what economic data is due out this week.  


Asian Markets Mostly Lower

Asian markets were mostly lower on Tuesday, despite shares of Chinese property stocks soaring after Bloomberg reported regulators are drafting a list of 50 developers that are eligible for various financing options. Still, China’s Shanghai Composite logged a fractional loss, while Hong Kong’s Hang Seng erased 0.3%, and Japan’s Nikkei marked a 0.1% drop. Meanwhile, South Korea’s producer price index (PPI) climbed 0.8% in October, a slower-than-expected reading after two consecutive months of acceleration, pushing the Kospi 0.8% higher.

European markets are also mixed this afternoon, after the Bank of England (BoE) said inflation is on track to hit its 2% target. At last glance, London’s FTSE 100 and France’s CAC 40 are down 0.5% and 0.3%, respectively, while Germany’s DAX is up a modest 0.09%.

Published on Nov 20, 2023 at 4:25 PM
  • Market Recap

The Dow barged into the holiday-shortened week with a 203-point gain, marking its sixth daily win in seven. Microsoft (MSFT) helped fuel today's rally, after news that former OpenAI CEO Sam Altman will lead the company's new artificial intelligence (AI) research team. Tech stocks rallied in response, helping the Nasdaq and S&P 500 register their fifth-straight gains. Wall Street's focus is now turning to the Federal Reserve's meeting minutes, due out tomorrow. 

  • 2 restaurant stocks drawing analyst attention.
  • Call traders blast Best Buy stock before earnings.
  • Plus, why NET could keep rallying; more on MSFT's record highs; and Dow member upgraded.

Closing Index Summary November 202023

NYSE and Nasdaq Stat November 202023

5 Things to Know Today

  1. Lawmakers issued subpoenas to the CEOs of X, Snap (SNAP), and Discord to compel them to testify on a hearing about online child sexual exploitation. (CNBC)
  2. Amazon.com (AMZN) announced a new program to train millions of workers in AI, as it competes for qualified talent with other tech major tech names. (MarketWatch)
  3. Cloudflare stock's recent rally could have legs.
  4. Options bulls have continued to target Microsoft stock
  5. Boeing stock upgraded on increased jet deliveries.

There were no notable earnings reports.

Unusual Options Activity November 202023

Oil Prices Settle Higher on OPEC+ Speculation

Oil prices settled higher on Monday, as traders bet on the Organization of the Petroleum Exporting Countries and its allies (OPEC+) extending production cuts. December-dated West Texas Intermediate (WTI) rose $1.71, or 2.3%, to close at $77.60 a barrel on the day.

Rising Treasury yields weighed on gold prices, which settled lower as waited Federal Reserve remarks. December-dated gold fell $4.60, or 0.2%, to close at $1,980.10 an ounce for the day.

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.

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