Unlocked: Premium Earnings 3-16-15 – DSW

Think earnings season has been over? Only for the pundits. There are earnings reports almost every day of the year. This is how we saw DSW prior to yesterday’s report:

One name today that reports before the open Tuesday, DSW, $DSW.

DSW, $DSW
dsw

DSW, $DSW, has moved in successive consolidation patterns after stepping higher since May 2014. The latest consolidation is getting very long compared to the last two. Heading into earnings the RSI is running along in the bullish range, while the MACD is flat. There is support lower at 36.70 and 35.70 followed by 35 and 34 before 32.55. There is resistance above at 37.75 and 39.25 followed by 41 and 43.35. The reaction to the last 6 earnings reports has been a move of about 9.05% on average or $3.40 making for an expected range of 33.80 to 40.70. The at-the money March Straddles suggest a similar $3.55 move by Expiry with Implied Volatility at 81% above the April at 40%. Short interest is moderate at 3.7%. Open interest favors the 35 to 40 Strike area this week.

Trade Idea 1: Sell the March 35/40 Strangle for a $1.05 credit.

Trade Idea 2: Buy the March 35/40/45 Call Butterfly for $2.45.

Trade Idea 3: Buy the March 35/40 1×2 Call Spread and sell the March 35 Put for $1.50.

Trade Idea 4: Buy the March/April 40 Call Calendar ($0.40) and sell the March 35 Put for a 25 cent credit.

#1 makes money from 33.95 to 41.05, a great range. #2 gives the short term upside and #3 adds leverage, both looking for 40 to stall it this week. #4 gives a possible entry on a retest of 35 and participation for the longer term for a move higher. I prefer #1 or #4.

Subscribers get trade ideas like these every trade. Wanna join? Sign up here

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
Dragonfly Caps Blog