Schaeffer's Top Stock Picks for '25

Options Traders Target Cybersecurity Stock Before Earnings

The stock is inching lower ahead of the event

Digital Content Manager
Aug 22, 2022 at 12:27 PM
facebook X logo linkedin


The shares of Palo Alto Networks Inc (NASDAQ:PANW) are inching lower today, last seen down 0.5% to trade at $511.05, just ahead of the tech name's fiscal fourth-quarter earnings report, due out after the close. PANW is attempting to find its footing near the 80-day moving average, though the 100-day moving average looms just above as a potential ceiling on the charts. The equity has added 39.5% in the past 12 months, though it's suffering a 7.9% year-to-date deficit. 

panw chart aug 22

The stock scored a bull note earlier this month, and most members of the brokerage bunch are incredibly optimistic on the equity. Of the 26 in coverage, 25 call it a "buy" or better. What's more, the 12-month consensus price target of $631.23 is a 23% premium to current levels. 

Short sellers have been hitting the exits, off 4.2% in the last reporting period, though there's still room for some of this short interest to unwind. The 6.95 million shares sold short account for 7.1% of the stock's available float, and would take almost one week to cover, at PANW's average daily pace of trading. 

Options traders have also taken a bullish stance, given short-term traders have rarely been more call-biased. This is per PANW's Schaeffer's put/call open interest ratio (SOIR) of 0.95, which sits higher than just 2% of readings from the past year.

Today's options activity leans bearish, though. So far, 13,000 puts have been traded, which is five times the intraday average, compare to 11,000 calls. The most popular positions are the September 550 call and 400 put, with positions being opened at the former. 

Speaking of options players, they are pricing in a 12.3% post-earnings move for PANW, regardless of direction, which is much larger than the 6% swing shares averaged during their last eight earnings reports. The equity has usually done after those events, settling higher in six of these eight next-day instances. This includes an impressive 18.6% next-day surge in August 2021.

 
 

Which of These SUB-$5 Stocks Could 26x From Here? (AD)

He called a rare 11x on Tesla…

Then he called a 26x on Workhorse…

Then an even rarer 35x on Nio Inc…

Now Tim Bohen says these 5 tiny “America First” stocks are next up in 2025.

They’re trading for less than $5 right now.

But thanks to Elon & Trump’s new alliance…

They could be off to the races in Trump’s first 100 days.

And right now for a limited time…

You can get the names & tickers for just $1 here. (AD)

10 Stock Picks FREE
 
 

Featured Articles from Trusted Partners:

🚀 One Stock Pick Could Change Everything in 2025
What if one stock pick could define your success next year? Get 10 expert-vetted stocks set for 2025—plus 5 bonus picks to watch now. Get the Report →

🆕 New Options Need New Trading Strategies
Zero-DTE options are the newest (and hottest) options to trade.  Professional traders have rushed into the market and are making a mint.  Don’t get left behind - learn all about these options, how to trade them, market setups to profit from, plus much more. Download now →

👀 Revealed: 3 Defensive Stocks for Your Portfolio
Worried about the market? This free report reveals 3 under-the-radar defensive stocks for uncertain times in any kind of economy.

 

 
 

FREE Report Download

 

Follow us on X, Follow us on Twitter