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Options Earnings plays
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KMX headlines says beat...BUTthey missed the whisper numbers. Let it rise over 35 and then short. The whisper number is $0.42, three cents ahead of the analysts estimate. KMX has a 62% positive surprise history (having topped the whisper in 18 of the 29 earnings reports for which we have data). The average price movement (starting at next market open) within ten trading days of these twenty-nine earnings reports is -1.2%. The strongest price movement of -2.0% comes within thirty trading days when the company reports earnings that beat the whisper number, and -5.7% within twenty trading days when the company reports earnings that miss the whisper number (negative reactor). Last quarter the company reported earnings two cents short of the whisper number. Following that report the stock realized an 8.5% gain in twenty trading days http://www.marketwatch.com/story/updates-advisories-and-surprises-2012-04-05?siteid=yhoof2 http://seekingalpha.com/article/480081-whisper-number-impact-earnings-preview-for-pier-1-carmax http://wallstcheatsheet.com/stocks/carmax-group-earnings-fifth-straight-quarter-of-shrinking-margins-but-profit-rises.html/ BB pinched so it is ready for a big move. http://stockcharts.com/h-sc/ui?s=KMX&p=D&yr=1&mn=1&dy=20&id=p29355643223
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