Mid-Market Update for 3/9/2017

HIBB, ZUMZ on Deck with Earnings

12:35pm (EST)

The retail sector will spotlight two more companies for Wall Street to take aim at with Hibbett Sports (HIBB) and Zumiez (ZUMZ) reporting earnings ahead of tomorrow’s opening bell. I did homework last night on both stocks with a more bearish feeling towards HIBB and a neutral bias towards ZUMZ. Both stocks will likely be on the move Friday with possible 5%-10% price swings.

HIBB’s chart shows a death cross formed in early February with the 50-day moving average falling below the 200-day moving average. The 100-day moving average also fell below the 200-day moving average earlier this month. These are bearish developments that tend to lead to lower stock prices. Tuesday’s trip to $27.35 was a fresh 52-week low. Short-term resistance is at $28-$28.50.

Analysts haven’t been too bullish on the stock as there are currently 15 Hold ratings along with 3 Underperform ratings of the 18 suit-and-ties that cover the company. The 52-week peak is just south of $46 and was set back in November 2016. The interesting part of this story is that shares have fallen over 40% with 4 ratings changed from Buy to Hold over the past 3 months. There are no sell recommendations.

HIBB is expected to earn a profit of $0.54 a share on revenue of $252 million. The company missed estimate by 8 cents last quarter following 3-straight earnings beats of 2-3 cents. An earnings beat with raised confidence could ignite some short covering along with analyst upgrades. Another earnings or revenue miss could get more Hold ratings switched to a Sell rating.

Bearish traders can target a lottery play with the HIBB March 25 calls (HIBB170317P00025000, $0.25, up $0.07) for a possible drop below $25. These put options would double from current levels if shares trade below $24.50 by next Friday, technically, and when these options expire.

The HIBB April 25 puts (HIBB170421P00025000, $0.70, up $0.10) would give the trade and extra month plus to play out. This trade would make a 100% return from current levels if shares fall below $23.60 by April 21st.

I didn’t list any call options for HIBB but shares could push $30 on a surprise quarter. However, Dick’s Sporting Goods (DKS) shares fell from $52.61 to $48.08 despite topping estimates by 2 cents last week when they reported. The problem is DKS lowered current quarter guidance. I will be on the sidelines with HIBB, as I don’t see the need for added risk at the moment.

Trading has once again been choppy and has stayed within a tight range ahead of tomorrow’s jobs report. Wall Street could be in for a surprise to the upside as Wednesday’s ADP reported private payrolls surged 298,000 in February, well above the expected addition of 187,000 jobs. This could help the bulls if blowout numbers are reported for Nonfarm Payrolls Friday morning.

Heading into the second half of action, The Dow is up 4 points to 20,860 while the S&P 500 is gaining 2 points to 2,365. The Nasdaq is higher by 5 points to 5,842 and the Russell 2000 is adding 2 points to 1,368.

I could have a New Trade ahead of the closing bell so stay locked-and loaded in case I take action. In the meantime, let’s go check on our current plays.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 16-3 (84%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records.

Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the 8am and 12pm–2pm (EST) updates. Also, I will usually give you a heads-up if I think I’m going to send a Trade Alert outside of these time frames.


Advanced Micro Devices (AMD, $13.25, up $0.03)

AMD April 14 calls (AMD170421C00014000, $0.82, flat)

Entry Price: $0.90 (3/7/2017)
Exit Target: $1.80
Return: -9%
Stop Target: 45 cents

Action: Resistance is at $13.50-$13.75. Support is at $13-$12.75.


Amicus Therapeutics (FOLD, $7.34, up $0.13)

FOLD April 8 calls (FOLD170421C00008000, $0.35, flat)

Entry Price: $0.60 (3/2/2017)
Exit Target: $1.20
Return: -42%
Stop Target: None

Action: Resistance is at $7.50. Short-term support is at $7-$6.75.


Tower Semiconductor (TSEM, $22.87, down $0.31)

TSEM April 24 calls (TSEM170421C00024000, $0.40, down $0.10)

Entry Price: $0.65 (3/1/2017)
Exit Target: $1.30
Return: -38%
Stop Target: None

Action: Support is at $22.75. Resistance is at $23-$23.25.


Vuzix (VUZI, $7.15, up $0.15)

VUZI April 7.50 calls (VUZI170421C00007500, $0.55, up $0.05)

Entry Price: $0.50 (2/27/2017)
Exit Target: $1.00
Return: 10%
Stop Target: None

Action: Resistance is at $7.25-$7.30. Support is at $7-$6.75.


Flex (FLEX, $16.49, up $0.10)

FLEX April 17 calls (FLEX170421C00017000, $0.25, up $0.03)

Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: -29%
Stop Target: None

Action: Support is at $16.25-$16. Resistance is at $16.75-$17.


TherapeuticsMD (TXMD, $6.81, up $0.12)

TXMD June 7.50 calls (TXMD170616C00007500, $0.95, flat)

Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: 27%
Stop Target: None

Action: Resistance is at $6.75-$7. Support is at $6.50-$6.25.