While Tuesday after the close isn't a huge earnings night, there are a few names worth watching. Most notable are FedEx (FDX) , Micron (MU) , and Jabil (JBL) . Honestly, I'm not sure if Micron or FedEx will get more press. I'd lean towards Micron, but it's close in my view. All three names are priced to move much greater than their historical average. We can thank the current market conditions for that.
Year-to-date, FedEx is down 27%, Jabil is down 18%, and Micron is down 17.6%. I should add that Micron is down 42% over the past six months after a huge run to start the year.
Jabil appears to be the only stock priced relative compared to historical movements. The stock is anticipating an 8% move post-earnings this week. The past three reports have seen the stock move double-digits intraday, but prior to that the previous year saw very low single digit moves. Given the current market that has dropped JBL around 14% in the last two weeks, I can understand this one being priced on the high side of average. The best strategy I see for Jabil is post-earnings. The stock has been lower from its post-earnings close six times in a row 13 days later. After 21 days, that number increases to 12 times in a row. Jabil, at the very least, appears to be a bearish call sale candidate after Wednesday's close, possibly even a short.
Micron, for its part, is pricing a 9% move between Wednesday and Friday. Micron hasn't moved intraday 9% the first-day post-earnings in almost two years. It hasn't closed above a 9% move in a full two years. Add to that the stock has had trouble getting moving after earnings. If we examine how the stock does between its post-earnings first day close and two time periods: two weeks and three weeks later, we find it has been lower the last four reports. The 21 day time period has seen the move volatile moves of 6-8%. In fact, Micron may make a better post-earnings long volatility play than pre-earnings.
If I'm playing anything into earnings, it would be iron condors on FedEx. The stock is pricing a 6% move, something it hasn't done in over two years. The biggest recent move was 5% last quarter. The stock does tend to follow the trend of the first day post-earnings close. Lower begets lower. Higher begets higher. Although none of the follow throughs have been large moves, it is enough to consider a strategy post-earnings of selling a spread. If FedEx closes higher tomorrow, then consider (selling) bullish put spreads and if FedEx closes lower, then consider (selling) bearish call spreads.
As far as a play into FedEx earnings:
Sell to open 1 Dec 21 $195 call
Sell to open 1 Dec 21 $175 put
Buy to open 1 Dec 21 $200 call
Buy to open 1 Dec 21 $170 put
Net Credit $165
Max Risk $335
Max Reward $165
Days until expiration 3