Retail Earnings Plays Are Rare

I'm a bit mixed into earnings this afternoon. Retail has been scary, and outside of (CRM), two retail names have my attention, and one of them, PetSmart (PETM), has a downright scary-looking daily and monthly chart. It is so scary that proper decorum prevents me from posting it. Simply watch $62 on the daily close and $60 on the monthly close. A daily close under $62 brings $52 into play as a target. A close under $60 on the monthly level brings $45 into play as the target.

PetSmart has been a great fade play after earnings, as it has closed below its open four times in a row now. The moves have been small enough for someone to argue that selling a straddle might make sense. The fact that there are only June options would keep me away from that trade, especially once you realize how ugly the chart is. I would consider buying the July 60 put/65 call strangle and selling the June 60 put/65 strangle against if for $0.75, but that is the only pre-earnings move I'm willing to make....201 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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