2 Volatile Stocks Present Bargains (DOCU & SFIX Earnings Preview)

Market weakness creates trading opportunities for two stocks that report earnings this week.

DocuSign Inc. (NASDAQ: DOCU) Dropped by 65% ​​from its last record, and Stitch Fix Inc. (NASDAQ: SFIX) Dropped by 90% from an all-time high.

As these two volatile stocks hit earnings, let’s see what we can expect during their quarterly talks this week.

Edge spaces summarize

Our shares Last Week Were involved.

ACADIA Pharmaceuticals Inc. (NASDAQ: ACAD) Still in consolidation pattern.

SI-Bone Inc., on the other hand, (NASDAQ: SIBN) Starts breaking upwards. Look for the stock to rise from here.

Edge spaces Inventory No. 1: Stitch Repair (NASDAQ: SFIX)

Date of declaration of income: Tuesday, after closing.

expectations: Earnings at loss of $ 0.30 per share. Revenue of $ 514.89 million.

The average analyst rating: to hold.

Stitch Fix is ​​an online clothing retailer that provides all the clothing items you need right up to your doorstep. It started in 2011, but was only released in 2017. He had a few moments before, but none like we saw in 2021, where he reached a high of over $ 110 a share.

The stock won out among retailers as the plague pushed online clothing shopping.

It was a step up from the competition, so the price increase makes sense.

Then everything stopped.

Since its peak, SFIX shares in Makhteshim have been 90%.

The rapid collapse of SFIX

Source: Optuma.

As can be seen in the chart above, SFIX is on a downward trend. But, as I wrote in Masters of real options, There are a lot of bargain stocks right now – but you must know where to look. And Stitch Fix may be a company that will get on your radar.

We’ll see how things go with this latest earnings report, but when the stock returned below $ 20 a share, it was so low only once before – March 2020.

I’m looking at this stock for a long term play, but it will start with gains. Bullet moves in the spaces will be a catalyst for a jump to SFIX.

To put in perspective how volatile this stock is already, the options market is pricing a huge 10% move on earnings. That eliminates a lot of plays and good options because you will pay too much premium to make profits.

It is better to wait for the trend that develops after the profits on SFIX from trading an environment of volatile pre-profits options.

Inventory # 2: DocuSign (NASDAQ: DOCU)

Earnings Announcement Date: Thursday, after closing.

expectations: $ 0.48 earnings per share. Revenue of $ 561.62 million.

Average Analyst Rating: Better performance.

DocuSign is more of an all-weather company than Stitch Fix. It benefits people who have gone the distance, as it provides cloud-based documents that are easy to sign, but it also facilitates all kinds of paperwork in our daily lives.

Perhaps this is why DOCU fell “only” 65% from its all-time high in September 2021.

12-month volatility of DOCU

DocuSign DOCU Stock Chart Earnings

Source: Optuma.

A steep and steep decline usually occurs only in bear markets. And this is what I think is going through these small to medium-sized stocks. Once high flying names that have seen sales climb during the plague are punished as Investors Take profits and move to a more risky environment.

But it will not last long.

We can expect gains to see when investors’ appetite for stocks like DocuSign turns into a corner.

DOCU is another stock that expects a 10% move this week in earnings. This is a big move, even with a profit announcement.

This may be a great opportunity to sell margins (a variety of options of the same type – either call or put – on the same property), perhaps Iron condor If you can achieve a wide enough range.

Because traders expect a 10% move, any move above or below this level misses the mark. And I do not think the market will be on top with that.

With all the fear in the market this week, I do not see the DOCU jumping by 15% to 20% this week either.


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