July 30 – Archer Aviation (NYSE:ACHR) dropped 10% over the past 5 days, and investors are clearly treading carefully ahead of the company’s upcoming earnings report, due August 11. With options activity picking up and volatility expectations rising, the market is on edge.
Roughly 97,000 options contracts traded hands, with more calls than puts. The put-call ratio hit 0.5, higher than its recent average of 0.27. That usually hints traders are buying more protection on the downside. Meanwhile, 30-day implied volatility rose to 86.2%, suggesting a 50% chance the stock could swing more than 12.1%, or about $1.23, in either direction after earnings drop.
Still, not all the signals are bearish. ACHR is holding above both its 20-day and 50-day exponential moving averages, $9.80 and $8.16, respectively. Plus, the MACD indicator is still positive at 0.91, showing the bulls haven’t totally checked out.
With earnings looming, expectations mixed, and traders hedging bets, Archer’s stock could be in for a bumpy, but interesting, ride.
This article first appeared on GuruFocus.