11/13 – 2:55 p.m. New York time
HD analysis posted.
11/13 – 2:40 p.m. New York time
I have updated JD with results.
11/13 – 9:50 a.m. New York time
I have exited JD for a profit and shall update the analysis with results later in the day/
HD’s earnings surprise score remains a bit lower than I like, but high enough to trade using options if I’m of a mind. The bid/ask spread on a directional bull trade is sufficiently low to meet my standards. The non-directional spread is overly high and so is off the table unless it improves.
None of the potential earnings plays using shares — DKS, ICON, MTSC, NCSM, SBBP, SSYS and VRS — meets my standards, on two grounds: I require that the Zacks score be neutral or bullish (3 or greater) and that the earnings surprise predictor be positive (>0). Only HD meets that standard, and since it qualifies for an options trade, its off the table for shares.
i anticipate no new data from Zacks prior to the closing bell, so the shares prospects are off the table.
11/12 – 10 a.m. New York time
I have one earnings play using options on my prospects list: HD. The likelihood of an upside earnings surprise is great enough to be attractive but not so great as to preclude the possibility of a direction neutral trade.
As of Friday’s close the bid/ask spread is acceptable for the direction-neutral strategy, and way too wide on the bull strategy to meet my standards.
As the metrics presently stand, my best course will be to trade HD as a share-based bullish earnings play. If the Zacks earnings surprise predictor score increases on Monday then I shall consider a directional options play, but only if the bid/ask spread declines from its present 72% down to around 25%, which is my standard for selling option vertical spreads. If the earnings surprise score declines further, then I shall look to the directional-neutral option strategy. It’s all very much up in the air.
For earnings plays using shares, I’m also considering DKS, ICON, MTSC, NCSM, SBBP, SSYS and VRS.
Turning to the full week, my potential earnings plays using options, selected from 196 symbols, are:
| sym | action | earnings date | meridian |
| HD | 11/13 | 11/14 | am |
| EFX | 11/14 | 11/15 | xm |
| CSCO | 11/15 | 11/15 | pm |
| NTAP | 11/15 | 11/15 | pm |
| NTES | 11/15 | 11/15 | pm |
| WMT | 11/15 | 11/16 | am |
| AMAT | 11/16 | 11/16 | pm |
This is a preliminary screening. I shall no doubt uncover problems and ambiguities as I work through the week.
My earnings plays using shares will be selected from these symbols that have survived preliminary screening.
| sym | action | earnings date | meridian |
| DKS | 11/13 | 11/14 | am |
| HD | 11/13 | 11/14 | am |
| ICON | 11/13 | 11/14 | xm |
| MTSC | 11/13 | 11/13 | pm |
| NCSM | 11/13 | 11/13 | pm |
| SBBP | 11/13 | 11/14 | am |
| SSYS | 11/13 | 11/14 | am |
| VRS | 11/13 | 11/14 | am |
| AUPH | 11/14 | 11/14 | pm |
| MTOR | 11/14 | 11/15 | am |
| REXX | 11/14 | 11/14 | pm |
| WGL | 11/14 | 11/15 | xm |
| YOGA | 11/14 | 11/14 | pm |
| HP | 11/15 | 11/16 | am |
| SFS | 11/15 | 11/15 | pm |
| STNG | 11/15 | 11/16 | am |
| VIAB | 11/15 | 11/16 | am |
| SBLK | 11/17 | 11/20 | am |
| URBN | 11/20 | 11/20 | pm |
Some have overly wide bid/ask spreads at present, and if those persist they will go no further in my analysis.
By Tim Bovee, Portland, Oregon, November 12-13, 2017
Disclaimer
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.
License
All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at www.timbovee.com.
