Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Jan 24, 2025 at 11:01 AM
  • Analyst Update

Cloud stock Twilio Inc (NYSE:TWLO) is skyrocketing to two-year highs today, up 22.4% at $138.77 at last glance. The company issued a strong revenue forecast at yesterday's investor event, drawing an upgrade to "outperform" from "neutral" at Baird. A flood of other analysts chimed in with price-target hikes as well, including Oppenheimer to $160 from $90. 

Shooting past recent pressure at the $117 level, TWLO is on track for its best single-day percentage gain since May 2020. Year over year, the equity is up roughly 91%. 

Options traders are blasting Twilio stock in response. So far, 40,000 calls and 18,000 puts have crossed the tape, which is already 19 times the stock's average daily options volume. The February 150 call is the most popular, followed by the weekly 1/24 150-strike call, with new positions opening at both. 

Over the last two weeks, puts were picked up at their fastest pace all year at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This leaves plenty of pessimism to unwind today. 

Published on Jan 24, 2025 at 10:10 AM
  • Buzz Stocks

Novo Nordisk A/S (NYSE:NVO) today announced positive early-stage trial results for its amycretin obesity drug. The treatment, which overweight and obese patients used once a week, resulted in 22% weigh reduction. In response, NVO was last seen up 8.8% to trade at $87.73.

Shares are bouncing off their Jan. 17, 52-week low of $78.17 to blast through their 20-day moving average, which had been acting as resistance since December. The security is also on track for its biggest single-day percentage gain since March 7, as it chips away at a 16.2% year-over-year deficit.

There isn't much contrarian potential fueling today's rally. Short-term options traders already lean bullish, per the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.55 stands higher than only 7% of annual readings. This implies short-term options traders have been more call-biased.

The brokerage bunch echoes this optimism, with 12 of 16 analysts in question calling NVO a "strong buy," while its 12-month consensus target price of $119.76 is a 35.9% premium to current levels.

Drilling down to today's options activity, 21,000 calls and 9,229 puts have crossed the tape, which is four times the intraday average volume. The most popular contracts are the weekly 1/24 90-strike call and the February 90 call, with new positions being opened at the latter.

 
Published on Jan 24, 2025 at 9:12 AM
  • Analyst Update
  • Buzz Stocks

PVH Corp (NYSE:PVH) stock is down 2% in premarket trading following a downgrade from J.P. Morgan Securities. The brokerage downgraded the fashion giant's rating to "neutral" from "overweight," and slashed the price target from $149 to $113.

Heading into today, PVH shares already carried an 8.9% year-to-date deficit. Despite this, five of the 14 covering brokerages maintain a "hold" rating. The equity's consensus target price of $126.31 represents a 31.1% premium to Thursday’s close, signaling the potential for bearish notes that could create additional headwinds.

Longer term, PVH stock is down 18.1% year over year and looking to open around the $94 mark, inching closer to its Jan. 16, 52-week low of $88.60. Plus, a ceiling could be forming at its 100-day moving average.

Options look to be an appealing strategy for investors. PVH'S Schaeffer's Volatility Index (SVI) of 33% ranks in the relatively low 20th percentile of the last 12 months. What's more, the security's Schaeffer's Volatility Scorecard (SVS) sits at a low 25 out of 100, making it a prime premium-selling candidate.  

Published on Jan 24, 2025 at 9:07 AM
  • Opening View
 
Published on Jan 23, 2025 at 4:29 PM
Updated on Jan 24, 2025 at 8:52 AM
  • Market Recap
 
Published on Jan 23, 2025 at 2:57 PM
  • Buzz Stocks

President Donald Trump's inauguration brought several industries into focus, including crypto, semiconductor, and nuclear energy names. Defense stocks are also drawing attention under the new administration, so let's check in with sector heavyweights Lockheed Martin Corp (NYSE:LMT), RTX Corp (NYSE:RTX), and General Dynamics Corp (NYSE:GD).

Key Level to Watch for Lockheed as Earnings Loom

In the last 12 months, Lockheed Martin stock has amassed a more than 14% lead. However, the shares have taken a nearly 20% haircut since their Oct. 21 record high of $618.95. LMT was last seen trading at $496.22, the $500 level could be a pivot point going forward. 

The company made headlines earlier this week after securing a $270 million contract with the Air Force to integrate infrared sensors into their F-22 Raptors. Next week, Lockheed will be in the news once more, to report fourth-quarter earnings before the open on Wednesday, Jan. 28. Back in October, LMT gapped lower by 6.1% after its quarterly report.

RTX an Upgrade Target

Last seen up 1.5% to trade at $126.19, RTX is a chip shot from its Oct. 22 record high of $128.70. The shares boast a 41% year-over-year lead and are now on track for their fourth win in the last five sessions. The security has been on a steady climb since bouncing off long-term support at $142 and their 200-day moving average.

RTX was upgraded to "buy" from "neutral" at Citigroup earlier this week, with the analyst in coverage also hiking its price targe to $154 from $132. There's room for more upgrades to the stock, considering 12 of 23 in coverage maintain "hold" ratings and the consensus 12-month price target o f$133.13 is only a 5.4% premium to its current perch.

GD Testing Bearish Trendline

Similar to Lockheed, General Dynamics stock is 15.6% off its Nov. 13 record highs of $316.90. Last seen trading at $267.32, the equity is eyeing a third loss in the last four days with pressure emerging at its declining 50-day moving average.

Published on Jan 23, 2025 at 2:22 PM
  • Strategies and Concepts

How to Use Moving Averages in Options Trading

by Schaeffer's Digital Content Group

A moving average is a popular technical analysis tool used to reflect trends in the stock market and individual equities. Option traders use moving averages to determine which direction an equity’s price is likely to move over a specific time frame, and ultimately establish a position aligned with the estimated direction.

Moving averages are calculated using an equity’s past price performance, and they eliminate irregular fluctuations or day-to-day “noise” to provide a cleaner view of the stock's trend. There are three common methods to calculate moving averages: Simple, weighted, and exponential.

Simple Moving Averages

Simple moving averages involve a fairly basic calculation: Add a stock’s closing prices over a set number of days, and then divide the sum by the total number of days. For example, a 20-day simple moving average divides the sum of stock XYZ’s 20 most recent daily closing prices by 20. The resulting figure provides stock XYZ’s average price over the preceding 20-day time frame, and becomes that day's plot point within the trendline. With each new day, the most recent closing price replaces the oldest closing price in the calculation.

Although simple moving averages are the most common, some criticize the method for giving equal weight to each closing price in the data set instead of placing more significance on the most recent closing prices.

Weighted and Exponential Moving Averages

Unlike simple moving averages, weighted and exponential moving averages assign greater significance to a stock’s most recent closing prices. Weighted moving averages use a calculation similar to simple moving averages, except each closing price is assigned a weighting.

Heavier weightings are assigned to the most recent closing prices in the data set to ensure the moving average reflects recent trends and fluctuations. For example, a trader assigns a weighting of one to the first closing price in a 10-day weighted moving average and a weighting of 10 to the tenth day's closing price, giving the most recent closing price 10 times more significance than the oldest closing price.

Exponential moving averages assign a fixed percentage weight to a stock’s most recent closing prices to give greater significance to more current values. Exponential moving averages react to recent price movement more quickly than simple moving averages, which could translate into a faster entry or exit point for a trade.

Popular Moving Average Time Frames

Moving averages can be applied to any time frame -- days, weeks, months, or even 5-minute increments. A shorter time frame provides a closer reflection of the stock’s recent movement. Traders commonly use 10-day, 20-day, and 50-day moving averages to identify shorter-term trends and possible imminent trend changes.

Longer time frames produce smoother averages, since a broader swath of daily closing prices will be figured into the calculation. Some of the more widely followed longer-term moving averages include the 100-day and 200-day.

Interpreting Moving Averages

While there are several ways to calculate moving averages, each moving average shows us the same kind of information.

The direction of a moving average tells you the general direction in which the price is moving. If the moving average is angled up, the price is, or recently was, increasing. The opposite is true if the moving average is angled down. If the moving average appears to be moving sideways, the stock is in a trading range.

The slope of a moving average indicates the strength of a stock price’s current trend, particularly when viewed within the context of additional trendlines. A short-term moving average that rises above a longer-term moving average indicates the trend is bullish, whereas short-term moving averages that cross below longer-term moving averages confirm that the trend is bearish.

Moving averages can serve as support or resistance for a stock’s price, so traders will want to watch the charts to see how a stock has fared after previous meet-ups with various trendlines. If a stock has bounced from a specific moving average on multiple occasions, that trendline can be viewed as a likely area of support, and a potential entry point for a bullish trade. Conversely, a trendline that has repeatedly rejected a stock's rally attempts is considered to be resistance, and can provide entry points for bearish plays.

Published on Jan 16, 2025 at 2:53 PM
Updated on Jan 23, 2025 at 1:42 PM
  • Buzz Stocks

Chip suppliers ASML Holding NV (NASDAQ:ASML)Broadcom Inc (NASDAQ:AVGO), and Lam Research Corp (NASDAQ:LRCX) are higher today, after Taiwan Semiconductor (TSM) reported record quarterly profits and said they expect revenue to grow in the first three months of 2025 thanks to strong artificial intelligence (AI) processing chip demand.

ASML is up 4.3% to trade at $757.42 at last glance, but is still struggling with long-term overhead pressure at the $780 level, which rejected last week's rally. Shares are off to a decent start in 2025, sporting a 9.1% year-to-date lead.

AVGO was last seen up 1.8% to trade at $232.06, looking to add to its impressive 110.1% year-over-year lead. The equity is today on track for its third gain in the last four sessions, and is not too far removed from its Dec. 16, record high of $251.88, with support from the $220 level.

Outperforming its peers today, LRCX is up 6.2% to trade at $80.87 at last check. The stock earlier surged to its highest level since October, breaking above resistance at the $80 level as it paces for its third-straight daily gain. Over the last three months, shares added 10.6%.

Published on Jan 23, 2025 at 11:52 AM
Updated on Jan 23, 2025 at 1:23 PM
  • Midday Market Check

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Published on Jan 23, 2025 at 12:46 PM
  • The Week Ahead
          
Published on Jan 23, 2025 at 12:30 PM
  • Most Active Options Update
 
Published on Jan 23, 2025 at 10:47 AM
  • Earnings Preview
  • Intraday Option Activity
  • Buzz Stocks
 

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