Below is a brief recap on each of the top-volume, news-driven movers in Thursday's after-hours, taking a look at specific stocks' after-hours movement and how that trade may offer insight into potential floor supports, ceilings and trading ranges that could develop in Friday's pre-market and early regular session.
OmniVision Technologies (OVTI) slumped 6.2% to 34.14 in Thursday's after-hours trade after beating Q4 estimates and issuing guidance in a range that - at the low end - could be below Street estimates. OVTI cratered to an early after-hours low of 32.60 before popping up to still negative levels between 34.47 and 33.03 - a range where it stayed through the bulk of its evening trade. A pre-market open Friday may have potential near the 34.50 to 34 range. OVTI is favoring reversals in its post-earnings share performance - widening its share reaction in the next day's regular session 13 times and narrowing or reversing for 14 events. In one other quarter, the stock ended the after-hours flat and followed that move with a next-day gain. Looking deeper into the performance data, OVTI has seen an earnings-driven after-hours decline in 13 quarters tracked in our database. In seven of those quarters, or 54% of the time, the stock has seen its declines move deeper south in the following day's regular session. Despite the moderate widening pattern in place on earnings-driven downside moves, there was some significant upside volume that flowed into OVTI shares that could suggest the stock follows the broader reversal pattern. With that as a backdrop we would look to play the long side of the shares Friday morning, targeting possible entry points between 33.50 and 34, an area that could form as a near-term bottom support.
Blue Coat Systems (BCSI) declined 7.5% to 20.68 in Thursday's after-hours trade after missing its Q4 numbers and setting its Q1 guidance well below the Street view. BCSI slumped through the 21.20 mark to a brief early after-hours low of 19.64. Buyers were quick to flood into the shares off the low, driving BCSI back up to still negative levels between 20.80 and 20.26 through the rest of the evening session. A pre-market open Friday may have potential in the 20.75 to 20.50 range. BCSI has seen more aggressive follow-on regular session closing levels following 17 of its last 28 after-hours earnings events. Looking deeper into the data, BCSI has recorded 16 post-earnings extended-hours declines, and it has extended its move seven times, or 44% of the time, during next-day trading. The reversal pattern in place on BCSI's earnings-driven downside moves, combined with some strong upside momentum recorded in Thursday's after-hours trade, would have us looking at playing a potential long bet on the shares Friday morning. Longs may want to linger near the 20.25 to 20.50 area to start, a range that stood as a floor support through most of the after-hours and where there may be room to catch some upside back into the 20.50 to 20.75 range.
rue21 (RUE) advanced 15.2% at 32.96 in after-hours trade after beating Q1 estimates and guiding in-line to above expectations for its its FY and Q2 guidance. RUE advanced from 29.50 to a high of 33.25 in the early first-half of night trading. It steadied close to 32.55 to 33.05 through the rest of the after-hours. A pre-bell open Friday may have potential in the 32.50 to 33 range. RUE has recorded an earnings-driven after-hours gain in five of the last six quarters tracked in our database. Also, 83.3% of the time (five out of six times) the stock followed-through in the same direction by the close of the next day's regular session compared to the extended hours "effective close." When it followed-through, the price closed further in the same direction on average by 6.3% (in five events) from the effective close. RUE's consistent tendency to add to evening upside moves would have us targeting a potential long play on the shares Friday. Buyers may want to watch for possible entry points between 31.50 and 32.50, a range where upside momentum was most confident through much of Thursday's after-hours session.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.