Large Heaps may see largest earnings transfer in years. How one can commerce it
Big lots could see a big move this week after winning.
The department store operator’s implied volatility – how far the stock could move up or down after Friday’s earnings report – is higher than it has been in years, Piper Sandler’s Craig Johnson told CNBC last week.
Overall, the stock has “pretty constructive bias on earnings pressure,” the company’s senior technical research analyst said on CNBC’s “Trading Nation” on Friday.
“They had a bit of a bullish flag that was forming,” Johnson said, referring to the Big Lots stock chart. “The $ 64 level being retested is a pretty large overhead resistance level, and any kind of pause above it would be a good indication that another higher leg is beginning to unfold.”
Big Lots stock rose 1.5% to $ 63.54 on Friday.
“I’d also like to point out that the relative strength trend is improving versus the S&P 500,” said Johnson. “In the options setup … it looks like you have about 14% implicit pull on this pressure, which is a bit bigger than what we’ve seen in the last 10 years … playing that me think it makes a lot of sense to go into printing for a long time. “
A 14% increase would bring Big Lots stock to around $ 72.50. A 14% decline would leave the stock at around $ 54.60 per share.
Also aiming is one to be seen ahead of Tuesday’s earnings report, said Gina Sanchez, founder and CEO of Chantico Global and chief market strategist at Lido Advisors.
“The Lido Recovery Portfolio has established a position in Target,” she said in the same interview with Trading Nation. “If you look at Target’s performance, they just knocked them down during the pandemic. They made very strong sales, but they also improved their e-commerce game.”
If Target’s e-commerce metrics are roughly on par with the last quarter when they were up 102%, it could help the stock, Sanchez said.
“It’s a massive part of their story, and the prospect for Target is getting better, and yet their ratings are actually … cheaper than other similar ones [and] They have bigger margins, “she said.” So overall, we think Target is something to watch. “
Disclosure: Piper Sandler is a registered market maker for Target. Lido Advisors owns shares of Target.
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