Although first-quarter earnings season doesn’t officially start until next week, former Dow component Alcoa (AA) announced its numbers after Wednesday’s bell. Alcoa’s EPS beat expectations, but the company failed to hit revenue targets. The call options have been active this week, as bullish traders were betting on a move past $14, but shares are down in the pre-market.
Looking ahead, Constellation Brands (STZ), PriceSmart (PSMT), Ruby Tuesday (RT) and Walgreens Boots Alliance (WBA) head up Thursday’s notable players.
There are no marquee companies announcing numbers on Friday, but there could be a surprise earnings warning or two if companies think they will miss estimates. However, earnings warnings don’t happen often, or as often as they should, as corporate management teams would rather let Wall Street decide the fate of their stocks.
I will likely refrain from trading any of the aforementioned names on earnings. However, given that the market closed higher for the third time in the past four sessions and the closes above resistance were bullish, I do have some other opportunities in play including a trade in Sony (SNE) and a new recommendation or you today in Comcast (CMCSA).
CMCSA shares recovered their 50-day moving average, and their recent push past $58 suggested further strength, which is what we’ve seen. Shares closed a penny off of their high on Wednesday and cleared $59 in the process.
Buy to open the CMCSA May 60 calls (CMCSA150515C00060000) at current levels.
My exit target for the calls is $2.10, and I am watching $1.00 as a potential stop area, though I don’t recommend that you set a hard stop at this time. CMCSA’s 52-week high is at $60.70 and will likely be challenged on continued strength. Support is at $58.00 to $57.75 and the 50-day moving average.
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