We have seen this type of scenario play out to upside breakouts
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$IWM
The FOMC cut the target range for the fed funds rate for the first time since 2008
The FOMC decision will be announced at 2:00 p.m. ET today.
When we broke down in February we were at the highest RSI reading in history.
Since 1950, there had never been a down year for the market when the S&P 500 has gained at least 4.0% in January until this one.
Fitbit (FIT) is set to report Q3 results after the bell (released results last quarter at 4:05pm ET). The co has a conference call scheduled to follow at 5:00pm ET.
Cap IQ Consensus estimates Q3 EPS of $0.19 (vs. $0.24 in 3Q15) w/revs of $506.6 mln (+23.6% y/y).
Guidance
- On the Q2 call, co issued guidance for Q3, sees EPS of $0.17-0.19 vs. the $0.17 Capital IQ Consensus Estimate (at the time); sees Q3 revs of $490-510 mln vs. the $497.82 mln Capital IQ Consensus Estimate (at the time).
- On the Q2 call, co reaffirms guidance for FY16, sees EPS of $1.12-1.24 vs. the $1.17 Capital IQ Consensus Estimate (at the time); sees FY16 revs of $2.5-2.6 bln vs. the $2.58 bln Capital IQ Consensus Estimate (at the time).
Based on FIT options, the current implied volatility stands at ~ 75%, which is 64% higher than historical volatility (over the past 30 days). Based on the FIT Weekly Nov04 $12.5 straddle, the options market is currently pricing in a move of ~12% in either direction by weekly expiration (Friday).
Technical Take
Technically, FIT has been in a range for the better portion of this year. It found support in Feb and June with each probe of the $12-level, but also struggled to maintain strength above the $16-area.