Signet Jewelers ( SIG ) is scheduled to report its first-quarter numbers before the market open on June 6. Analysts forecast the company will post a loss of 11 cents per share for the quarter. SIG has struggled in 2018, falling 23.6% year to date.
SIG was recently trading at $42.26, down $35.68 from its 12-month high and $9.15 above its 12-month low. Overall technical indicators for SIG are bearish with a possible trend reversal. The stock has recent support above $37.50, and recent resistance below $47.50. All 10 analysts who cover the stock rate it a "hold". SIG gets a score of 43 from InvestorsObserver's Stock Score Report
The street has been incredibly bearish on Signet over the last year. The company has a mixed earnings track record, but results did top estimates on both the top and bottom line last quarter. The positive beats did nothing for the stock, with the company issuing bearish guidance that spooked the market and drove shares sharply lower. Tiffany reported much stronger than expected numbers toward the end of May which drove TIF shares sharply higher, and allowed SIG to move slightly higher in sympathy. There is a lot of negativity already priced into the stock, so if the numbers are in-line or slightly better than the $0.11 loss analysts expect, the stock could make a sharp rise, but the report has to show strength. Analysts have an average price target of $39.00 on the stock.
Stock Only Trade
If you want a bullish hedged trade on the stock, consider a July 30/35 bull-put credit spread for a 60-cent credit. That's a potential 13.6% return (101.6% annualized*) and the stock would have to fall 15.7% to cause a problem.
If you want to take a bearish stance on the stock at this time, consider a July 55/60 bear-call credit spread for a $0.30 credit. That's a potential 6.4% return (47.6% annualized*) and the stock would have to rise 30.9% to cause a problem.
Covered Call Trade
Originally published on InvestorsObserver.com