Hasbro and Halliburton: Premium Earnings from 4-19-13

• Posted by Greg Harmon
• on April 19th, 2013

Two names today that report before the open Monday, Halliburton, $HAL, and Hasbro, $HAS.

Halliburton, $HAL

Halliburton, $HAL, has been trending lower in a channel since topping at 43.82 in February. Now it is down through the previous resistance/support at 38.50, it did not hold the retest. The Relative Strength Index (RSI) is trying to hold onto bullish ground at the bottom rail of the channel as the and has been drifting lower with a Moving Average Convergence Divergence (MACD) indicator has been falling but may be leveling. A downward bias as it sits just below the 100 day Simple Moving Average (SMA). Support lower comes here at 37.40 and 35-35.20 followed by 31.85 and 30. Resistance higher is found at 41 and 42.60 with 43.82 above that and a Measured move to 51.16 should it break the channel Monday to the upside. The reaction to the last 6 earnings reports has been a move of about 4.10% on average or $1.54 making for an expected range of 36.15 to 39.35. The at-the money weekly April Straddles suggest a larger $2.00 move by Expiry with Implied Volatility at 46% well above the May at 35%.

Trade Idea 1: Buy the April/May 40 Call Calendar for $0.41.

Trade Idea 2: Sell the April/May 36 Put Calendar for a $0.38 credit.

Trade Idea 3: Buy the April/May 40 Call Calendar and sell the April/May 36 Put Calendar for $0.03.

Trade Idea 4: Buy the May/Jun 40 Call Calendar for $0.40.

Trade Idea 5: Buy the May/Jun 40 Call Calendar and sell the April/May 36 Put Calendar for $0.02.

I like #4 or #5 best with #2 a good choice

Hasbro, $HAS

Hasbro, $HAS, has been trending higher since the beginning of the year. The recent pullback found support at the 20 day SMA, which has has acted as support the whole run higher, and is moving up today. The RSI is bullish with a MACD indicator that is drifting sideways and slightly lower off of the highs. A upside bias and with 17% short interest to aid it higher. Support lower comes at 43.80-44.00 and 42.88 followed by 42.38, 41.50 and 40.00. Resistance higher is found at 45 and then free air higher. Note that the Measured Move higher takes it to 46.60. The reaction to the last 6 earnings reports has been a move of about 2.63% on average or $1.18 making for an expected range of 43.50 to 46. The at-the money May Straddles suggest a larger $2.40 move by Expiry with Implied Volatility at 23% near the June at 21%.

Trade Idea 1: Buy the May 45 Call for $1.00.

Trade Idea 2: Buy the May 45/47.5 Call Spread for $0.80.

Trade Idea 3: Buy the May/July 47.5 Call Calendar for $0.60.

Trade Idea 4: Sell the May 42.5 Put for a $0.50 credit.

Trade Idea 5: Sell the May/July 42.5 Put Calendar for a $0.55 credit.

I like #2 and #3 paired with #5 for best leverage and flexibility. You can pair with #4 as well

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