HRB trade ideas
HRB Rebound post-sell off, Buy 15JAN CALL $18 @ $0.2 - $0.4Fundamental analysis indicates HRB will continue to perform well under COVID restrictions, especially as newly implemented vaccinations bolster its broader market within the tax industry that includes face to face consultations (unlike intuit - TurboTax). The US is also entering its historic tax preparation season, following the holidays. Sentimental analysis sets the stage for a strong rebound ( there was an earnings based sell off as NYSE:HRB fell short of pervious years earnings gap for the quarter) all other news has posed several recent stock valuation upgrades. Average market analysis evaluation suggests a median valuation of $20, being at $16.40 creates $3 of potential value. Technical analysis shows NYSE:HRB has been in a 2 week bear run. The RSI highlights being in the oversold region (below 20). The MACD is posturing for a crossover below the 0-ine, and the 13 SMA is trending to cross over 30 SMA which will confirm the trade's validity.
Entry price - $15.95 - $16.80 // $0.15-$0.3 (18 DEC CALL $17 strike) // $0.2-$0.4 (15 JAN CALL $18 strike) // $0.65-$0.95 (16 APR CALL $18 strike)
TGT Sale price - $19 (conservative) / $21 (higher risk) // 100% option value (high risk)
Stop loss - $14.20 (conservative) / 50% of Options price (higher risk)
Max position size - 5% of portfolio
$HRB - short gameWatching for it to break through resistance here. Grab some options, sell before earnings.
MACD is lined up positively and stochastic is above 80, and it tends to ride out at least a few days once above 80 on stochastic.
It has been hibernating a long time, this one may get some legs and bust out.
HRB was a top quarterly gainer. Expect an Uptrend reversalH&R Block (HRB, $16.37) was one of top quarterly gainers, jumping +25.15% to $16.37 per share. My A.I.dvisor analyzed 54 stocks in the Other Consumer Services Industry over the last three months, and discovered that 54 of them (100%) charted an Uptrend while none of them (0%) trended down. My A.I.dvisor found 149 similar cases when HRB's price went up 15% within three months. In 122 out of those 149 cases, HRB's price went down during the following month. Based on these historical data, my A.I. thinks the odds of an Uptrend reversal for HRB are 82%.
$HRB Stay on the sidelines into earnings. UNLIKE MANY OF ITS COMPETITORS WHO ARE SOARING TO NEW HIGHS HRB IS STRUGGLING TO FIND ANY TRACTION IN THE MARKET. CURRENTLY ABOVE ITS AVERAGE ANALYSTS PRICE TARGET POST EARNINGS
A SWOON OF REGRADING COULD FOLLOW EARNINGS ON TUESDAY WHICH IS A RISKY POSITION TO BE IN.
From a technical perspective the stock is in a long term correction cycle which should have more downside, despite a golden cross recently the RSI has been in a downtrend and we think that the gap below needs filled before any positive moves higher. From a optimistic perspective there is a high short interest which could lead to quite a pop if earnings have any surprises, so we just sit and see what happens, no need to gamble on this.
AVERAGE ANALYSTS PRICE TARGET $25.72
AVERAGE ANALYSTS RECOMMENDATION HOLD
P/E RATIO 8.47
SHORT INTEREST 17%
COMPANY PROFILE
H&R Block, Inc. engages in the provision of tax preparation and other services. It offers assisted and do-it-yourself tax return preparation solutions through multiple channels and distribute the H&R block-branded financial products and services, including those of its financial partners, to the general public primarily in the United States, Canada, and Australia. The company was founded by Henry W. Bloch and Richard A. Bloch on January 25, 1955 and is headquartered in Kansas City, MO.
HRB - speculative PUTsHRB will release after market close tomorrow with estimated earnings boasted at 5.22. This is a whopping 39.9% increase from 3.75 actual earnings last year.
Just like last year, we can expect huge volality on Wed 06/13.
TA wise, to the down side, HRB is hitting the daunting yellow trendline. It's also wandering inside the resistance yellow region which it failled to break out the last 2 times, but now with the addition of the heavier burden of the yellow trendline mentioned.
Other than these 2 clues, I can't get a consistent wave count.
So this is the very unique time when the price movement will be completely determined by the earnings release. But if I have to speculate, I'll go with the downside.
2 confluent resistances to break and 39.9% increase in earnings to beat! No kidding!
