Telefonaktiebolaget LM Ericsson (ERIC) is a provider of communications technology, services, software and infrastructure for mobility, broadband and the cloud in telecom industry and other sectors. The stock is currently trading around $10.59 at the lower end of its 52 week range of $9.92-$13.28. The stock has been under performing the market this year falling 12.81% year to date. ERIC is scheduled to report earnings before the opening bell tomorrow, and the stock is quite bullish today ripping to the upside by $0.20 or 1.92% on the session ahead of the close.

Over the past 12 quarters ERIC has rallied on earnings day 5 times with an average move of 5.88%. The stock appears bearish on a chart going into the release having traded below the Ichimoku Cloud for the past few months since late May on the daily bars. Over the past 12 quarters ERIC has rallied from earnings to the nearest options expiration 7 times with an average move of 6.78%. The stock looks as if it could continue today’s trend and rip to the upside in today’s session receiving a lot of support. Investors are expecting to see slow growth in its North American revenues to be offset by the strengthening USD, but expect strong growth in Asia and Africa and moderate growth in Europe. The company has implemented ongoing cost and efficiency programs to improve profit margins.

The options market is currently implying a move of around $0.68 or 6.4% in ERIC by this Friday’s close giving us targets of $9.91 and $11.27.

Andrew Keene

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