Premium Earnings 9-10-12
- Posted by Greg Harmon
- on September 10th, 2012
One name that reports today after the close Shuffle Master, $SHFL.
Shuffle Master, $SHFL
Shuffle Master, $SHFL, has been consolidating in a symmetrical triangle since June. It has a Relative Strength Index (RSI) that is bullish, with a Moving Average Convergence Divergence (MACD) indicator that is positive. Both support an upside move, as do the rising Simple Moving Averages (SMA) on the 50 and 200 day timeframe. The target on the breakout above the triangle is to 19.50. Resistance is found at 15.60 and 16.25 followed by 16.75 and 18.33. There is support lower at 15.10 and 14.30 followed by 13.45, 13.10 and 12.35. Short interest could help it higher but is only about 6%. The reaction to the last 6 earnings reports has been a move of about 9.1% on average or $1.40 making for an expected range of 14.10 to 16.90. The at-the money Straddles suggest a roughly $1.50 move by Expiry with Implied Volatility at 55% above the historical at 36% and the October at 40%. Options activity is light but favors Calls, which are being bought.
Trade Idea 1: Buy the September 16/17/18 Call Butterfly for $0.25.
Trade Idea 2: Buy the September 16/17 Call Spreads for $0.35.
Trade Idea 3: Buy the September 16 Call for $0.50.
I will be playing the butterfly in small fashion.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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