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A technical breakout, a sharp upward move days ahead of First Solar’s earnings report
Related Symbols: FSLR
First Solar, Inc. (NASDAQ: FSLR) is rallying nearly 6% today, making it an early leader in the Nasdaq-100 Index (NDX). This move could be technically driven, as the stock has taken out intermediate-term resistance around the 120 level.
The move could also have a lot to do with earnings, which are due after the close on Thursday. Analysts are expecting the company to book $1.50 per share, an 11-cent decline from year-ago results. The “whisper” estimate, on the other hand, comes in at $1.35 per share, suggesting the Street has even lower expectations heading into the report.
First Solar’s front-month, at-the-money (120-strike) straddle is currently price at $12.10. This means the options market is expecting a move – higher or lower – of $12.10, or about 10%, between now and Friday, when February options expire. In comparison, the March 120-strike straddle is priced at $17.90, projecting a move of 14.7% between now and March expiration in more than a month. In other words, the bulk of any short-term price movement in FSLR is projected to occur in the next four days.
It could be a very volatile week indeed for FSLR shares, with earnings coming on expiration eve.
Interested in placing an event-driven trade in FSLR? A free virtual trading account with OptionsHouse can help screen potential option strategies for probability of success and other factors.
More on FSLR:
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