Aeropostale Earnings Play – Holiday Freebie
- Posted by Greg Harmon
- on November 28th, 2012
Now until December 2nd, the Annual Membership can be had at a Special Fibonacci Discount to the Rolling Monthly Rate. 38.2% off or $667.44. Follow the link here.
After a good move from American Eagle Outfitters (and a big win for subscribers) on the tails of the Abercrombie & Fitch move, Aeropostale $ARO, another teen retailer reports after the close tonight. It dropped ahead of the last earnings report and has done nothing since then moving in a tight channel between 12 and 15. Heading into earnings the momentum is to the upside with a rising trend support throughout November, and the Relative Strength Index (RSI) trending higher with a positive Moving Average Convergence Divergence (MACD) indicator. Resistance shows at 14.50 and 15 followed by 15.90 and a gap 16.46 to 16.89 then the big gap to 19.34. Support lower is at 12.90 and 12 with 9.15 from September 2011 below that. Short interest is not so bad at only about 7%. The last six reports have seen the stock move on average 9.38% or $1.32 making for an expected range of 12.75 to 15.40 and the December options are pricing in a $2 move by expiry with Implied Volatility at 65%, not much over the January options. The bulk of the activity in the options chain is taking place at the December 15 and 16 Strike Calls.
Trade Idea 1: Buy the December 15 Calls for $0.65.
Trade Idea 2: Buy the December 15/16 Call Spreads for $0.35.
Trade Idea 3: Sell the December 12 Puts for a 25 cent credit.
Trade Idea 4: Buy the December 15/16 Call Spreads selling the December 12 Puts for $0.10.
Trade Idea 5: Buy the December/January 15 Call Calendar selling the January 11 Puts for 10 cents.
I traded #4 as I am posting this at 6c
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
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)
- Checking Out Red Robin the First Day of Winter
- Premium Earnings 12-22-14
- Top Trade Ideas for the Week December 22, 2014: Bonus Idea
- Top Trade Ideas for the Week of December 22, 2014: The Rest
- Top Trade Ideas for the Week of December 22, 2014: The Rest Premium
- Top Trade Ideas for the Week of December 22, 2014: The Best
- SPY Trends and Influencers December 20, 2014
- Macro Week in Review/Preview December 19, 2014
- Dragonfly Capital Views Performance Through December 2014 Expiry
- Charting An S&P 500 March Higher