DRI reports before the market opens tomorrow. I did not make this play because the bid-ask spread of the options is not good. This is for my training/experience only.
Fundamentally it looks bad. I scored it at 2 to 2.5 out of 10 (bearish). Also, it has beaten earnings estimates only four times the past fifteen quarters, and has missed four of the last five quarters with the one exception coming in line. On the revenue side, it beat expectations only five times the past fifteen quarters, and missed the last four quarters. The company is not doing good.
Technically (see chart below), it is more bearish than bullish with a Rising Wedge pattern. The wedge it is not that important because a Rising Wedge is only as good as the direction it breaks out in, though they are more likely to break lower.
In the case of DRI, an argument could be made for an Ascending Triangle as well (bullish) because the resistance line of the wedge is not that steep.
But another factor that gives advantage to the bears is that it made a big move of 1.08% today closing at the highs of the day after trending up the past two months. Today's gain was the biggest in about five to six weeks. This is not a good sign for earnings.
So if I was making a play, it would have been Puts because I expect it to miss.
DRI-DAILY
BA-15MIN
BIDU-15MIN
JPM-15MIN
NFLX-DAILY
NFLX-15MIN
SLB-15MIN
TSLA-DAILY
TSLA-15MIN
WHR-DAILY
WHR-15MIN
SPX-DAILY V
SPX-DAILY IV
SPX-DAILY III
SPX-DAILY II
SPX-DAILY I
SPX-30MIN II
SPX-30MIN I
SPY-15MIN
