3 Big Earnings Movers
Welcome back to the Rude Awakening for Thursday, March 4, 2021.
As of this morning, the markets are back to familiar territory, sitting RIGHT on top of the 50day MA…
The past several days followed the same pattern back and forth–a big selloff and then a bounce back, followed by another selloff.
This morning, the indices are looking mixed, after yesterday gave us another selloff due to falling tech stocks.
With the newest unemployment numbers lower than expected, the better outlook is helping to boost investor sentiment.
Today will prove to be a pivotal day in the markets as we try to determine whether or not we’re going to see a directional change.
We are still in a bull market, even with these fluctuations, but if we are able to break the 50day MA, that might mean longer term losses…
With that, we have a few new important additions to your watchlist.
“Stocks trade mixed as bond yields resurge”
These are earnings driven plays… Companies that are anticipating much bigger moves than normal.
First up, we have Costco Wholesale Corporation (COST), and you can see in today’s video, we have seen a big correction in COST.
It’s right back down to its previous support level, though it did end up in the green after yesterday’s selloff.
No buy signals yet on COST, but with earnings coming this afternoon, the implied move is showing to be about 3.5%, compared to historical moves of less than 1%.
So, whether you are looking to buy COST or if you are an options seller, this is definitely one to consider before any moves come from earnings.
Next I want to show you GSX Techedu Inc. (GSX), a $20 billion company, with a similar pattern to Costco’s chart. GSX has come down to its previous support from last summer, just sitting above its 50day MA.
Again, buy signals have not kicked in yet, but the implied move based on earnings to be reported tomorrow morning is much higher than usual.
Lastly, we have Immersion Corporation (IMMR), a smaller company with a $260 million market cap. Similar to the other two, it’s come down to previous support. It’s below its 50day MA, but all the technicals are pulling toward a buy signal.
IMMR is reporting earnings this afternoon, and it’s seeing a 21% implied move in the options. That is big relative to its usual 9% move.
Have a great rest of your trading day.
We’ll see you tomorrow!
Editor, Rude Awakening