Sports Retailer Slips After Pre-Earnings Bear Notes

Put traders are targeting the stock as well

Deputy Editor
May 24, 2022 at 2:57 PM
facebook twitter linkedin


Dick's Sporting Goods Inc (NYSE:DKS) is slipping today, down 6.8% to trade at $70.16 at last check, ahead of the company's first-quarter earnings results, due out before the open tomorrow. A set of price-target cuts are weighing on the retailer today, after J.P. Morgan Securities slashed its price target to $105 from $118 and BofA Global Research lowered to $130 from $160.

This negative price action has DKS trading its lowest levels in over a year, and on track for its third-straight daily loss. Several short- and long-term moving averages linger above as potential pressure, including the 320-day trendline, which the stock closed below last month for the first time in roughly two years. Year-to-date, the equity is down 38.6%. 

DKS May24

Dick's Sporting Goods stock is seeing plenty of bearish options activity ahead of the event. The 20,000 puts across the tape so far represents seven times the average intraday amount, and double the amount of calls exchanged. The weekly 5/27 45-strike put is the most popular, with new positions being bought to open there. 

However, DKS has a fairly strong post-earnings history, with the stock finishing six out of its last eight next-day sessions higher. This time around, the options pits are pricing in a post-earnings swing of 21.7%, which is higher than the 7.8% move the security has averaged over the last two years. 

It's also worth noting that short interest represents a whopping 22.6% of the stock's available float, or nearly eight days' worth of pent-up buying power.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Best stocks for October and worst stocks for October
 


 


 
Special Offers from Schaeffer's Trading Partners