Bulls Rally Around Walgreen Company (WAG) Ahead of Earnings

Walgreen Company is scheduled to unveil its fiscal 1Q earnings report tomorrow morning

Dec 22, 2014 at 3:10 PM
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Walgreen Company (NYSE:WAG) is slated to take its turn in the earnings confessional ahead of tomorrow's open, with Wall Street calling for a fiscal first-quarter profit of 75 cents for the drugstore chain. Over the past four quarters, the stock has averaged a single-session post-earnings gain of 1.2%, which may be why options traders have shown a slight bullish bias in the months leading up to tomorrow's scheduled event.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WAG's 50-day call/put volume ratio of 1.95 ranks in the 60th percentile of its annual range. Echoing this call-skewed bias is WAG's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 0.22, which indicates that near-the-money call open interest outweighs put open interest by a roughly 5-to-1 ratio among options slated to expire in three months or less.

This upbeat stance toward WAG is witnessed elsewhere on the Street, as well. Short interest, for example, accounts for a low 1.2% of the stock's available float, and would take less than three sessions to cover, at average daily trading levels. Plus, 60% of covering analysts maintain a "buy" or better rating toward the equity, with not a single "sell" to be found.

On the charts, Walgreen Company (NYSE:WAG) has tacked on an impressive 28.6% year-to-date. More recently, the stock shot through previous resistance in the $69-to-$70 region earlier this month on news of a CEO switch, and was last seen lingering near $73.86.

Daily Chart of WAG Since January 2014

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