Eleventh-Hour Skeptics Swarm Splunk Inc. (SPLK)

Splunk Inc (SPLK) is struggling despite an earnings beat and a round of price-target hikes

by Digital Content Group

Published on Feb 27, 2015 at 2:29 PM
Updated on Jun 24, 2020 at 10:16 AM

Splunk Inc (NASDAQ:SPLK) received a rush of positive analyst attention this morning, following last night's well-received earnings report and better-than-expected guidance. In fact, no fewer than 15 analysts have upped their price targets on the software stock. However, it appears options traders aren't buying the optimism.

Taking a quick step back, SPLK options are trading at 10 times the expected intraday rate, and call volume roughly doubles put volume. Looking more closely, eleventh-hour speculators are targeting the weekly 2/27 series, which expires in roughly 1.5 hours.

Buy-to-open activity is detected at the weekly 2/27 70-strike put, as bearish bettors bank on additional downside through today's close. Meanwhile, it looks like a number of call traders are also skeptical, as sell-to-open action may be transpiring at the weekly 2/27 69- and 70-strike calls, which are currently out of the money. In other words, these sellers are convinced any potential rebound in the shares today will be capped at the respective strikes.

On the charts, despite surging out of the gate, Splunk Inc (NASDAQ:SPLK) has dropped to a 2.7% loss, currently perched at $67.68. What's more, Schaeffer's Senior VP of Research Todd Salamone earlier noted the stock was exhibiting a familiar post-earnings technical signal. If past is prologue, this latest candle pattern could spell additional downside for SPLK.


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