JD.com Beats While Expectations Were for a Loss
JD.com (JD) handily beat earnings expectations by a wide margin, while analysts figured the company would continue to burn cash. The stock is higher in the pre-market session (+13.60%) as a result.
The following is from EarningsWhispers.com.
“Jd.com Inc Ads (JD) reported 4th Quarter December 2018 earnings of $0.07 per share. The consensus estimate was a loss of $0.04 per share on revenue of $19.2 billion. The Earnings Whisper number was for a loss of $0.02 per share.
The company said it expects first quarter revenue of $17.65 billion to $18.25 billion. The current consensus revenue estimate is $17.78 billion for the quarter ending March 31, 2019.”
JD Shorts Miss the Mark
The stock sports a decent short percentage of 52,405,500 shares (6.53%). Shorts reeled in their exposure in recent weeks as the percentage dropped (-6%). That said, at the current volume rate, JD shorts would take 4.5 days to cover all of their positions.
JD.com Chart and Expectations
JD.com is trading (29.60) well above the 200d in pre-market action. The current trend is bullish, as price follows the rising 20d moving average. RSI is above 50, and should turn higher as a function of this price surge. Provided shorts continue covering positions, RSI would suggest the current bullish trend would persist.
Most of the TCP members are aware of JD, holding positions into earnings. We have a strangle, with the 25 put and the 27 call (2 x size). The puts were “just incase” JD missed or the stock dropped. That said, we’ll take the calls off at the opening bell and wait for the “volatility crush” before re-entering. The same thoughts follow the post-EPS trade on CSCO. The only difference was we had no position in CSCO going into earnings. We bought afterwards.
Futures are higher on better than expected GDP numbers this morning. Q4 annualized Q/Q 2.6% vs. 2.2$ exp. Personal consumption 2.8% vs. 3.0% expected. These two aren’t considered hot, so the FED will most likely stay the current course. No action. The futures market sees this as bullish, with price action rising.
Many stocks are setup going into the opening bell, so join us today in the trading room for our LIVESTREAM broadcast during market hours, as we trade JD.com and other new positions. Watch, listen and trade from 9:20 AM to 4:15 PM Monday through Friday.
Happy Trading,
Vinny
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