Q2 STOCKS TO BUY

Why Tapestry Stock Surged After Strong Quarterly Financial Results

TPR is bouncing off last session's 18-month lows

Deputy Editor
May 12, 2022 at 10:21 AM
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Tapestry Inc (NYSE:TPR) is surging today, up 12.4% to trade at $29.81, after its strong fiscal third-quarter results. The Kate Spade parent reported earnings of 51 cents per share on revenue of $1.44 billion -- higher than analysts' anticipated 41 cents per share on $1.42 billion. The company is also brushing off a slashed annual profit forecast due to Covid-19 lockdowns in China.

Brushing off the broader market's continuing selloff, TPR is also bouncing off of last session's 18-month lows of $26.39. A slew of short- and long-term moving averages linger above as pressure, including the 20- and 200-day trendlines. Year-to-date, the stock is down roughly 28%. A short-term bounce could have already been in the cards, per the equity's relative strength index (RSI) of 16.1, which sits firmly in "oversold" territory. 

The options pits have been leaning bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), 1.52 puts have been bought for every call in the last 10 days. This ratio sits higher than 96% of readings from the past year, showing puts being picked up at a much faster-than-usual rate.

Today, 1,556 calls and 2,275 puts have crossed the tape -- four times the intraday average. The weekly 5/13 30-strike put is the most popular, followed by the 30-strike call in the same series, with new positions being opened at the former. 

 

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