KHC has pulled back to its 40-day moving average
The shares of Kraft Heinz Co (NASDAQ:KHC) are sinking today, despite earlier reporting second-quarter earnings and revenue that beat Wall Street's estimates. Meanwhile, organic net sales rose by 7.4%, aided by consumers that bought more products amid coronaivurs-related lockdowns. However, the company recently took a writedown charge on several businesses -- Oscar Mayer and Maxwell House Coffee to name a few -- worth somewhere around $3 billion. In response, Kraft Heinz stock is trading down 5.4%, last seen at $33.64.
Today's dip has KHC pulling back to its ascending 40-day moving average, a trendline that the equity has closed above all but two times since early April. Since then, KHC has tacked on around 12%, also thanks to the 200-day moving average -- a trendline that acted as a floor for the equity between April and May. Elsewhere, during yesterday's trading, Kraft Heinz stock brushed a new yearly high of $35.87, a 79% premium to its mid-March, all-time low.
Meanwhile, the options pits are full of bullish activity. KHC sports a 50-day call/put volume ratio of 8.84 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 97th percentile of its annual range. This means nearly nine calls have been bought for every put over the last 10 weeks, showing a heather-than-usual appetite for long calls of late.
Today's options pits show a decent amount of activity as well, with over 16,000 calls and 4,247 puts exchanging hands -- double the intraday average. Most popular is the September 40 call, followed by the weekly 7/31 34-strike call, with new positions being opened at the latter.
Lastly, analysts are divided on KHC. Of the 11 in coverage, six sport a “hold” position. Meanwhile, four more call it a "strong buy," while one lone wolf carries a "strong sell."