After-Hours History Pegs Long Trades on Quiksilver, VeriFone for Friday

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 |  Includes: PAY, ZQK
by: Midnight Trader

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.

Quiksilver (NYSE:ZQK)
advanced 10.5% at 4.84 in Thursday's after-hours trade after topping Q2 expectations. ZQK dropped to an early evening low of 4.40 before recovering to a high of 4.90. It stayed firm in the green through the rest of night trade, holding a plus-side range of 4.65 to 4.88. A pre-market open Friday may have potential surrounding the 4.75 to 4.80 area. ZQK has recorded an earnings-driven after-hours gain in 11 of the last 12 quarters tracked in our MT Pro database. Also, 81.8% of the time (nine out of 11 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 12.1% (in nine events) from the "effective close." ZQK's strong tendency to add to an after-hours gain in next-day trade would have us looking at a potential long play on the shares Friday morning. Early buyers may want to test the waters in the 4.70 to 4.80 area, levels likely to catch a revisit early tomorrow and perhaps see strength back up near 4.90 or higher.

VeriFone (NYSE:PAY) edged 0.57% lower to 46.87 in night trade after topping Q2 estimates and setting its FY 2011 guidance in a range that straddles the Street view. PAY was a volatile mover at the start of night trade, sliding to an early evening low of 46 before setting off on an upside run that took it to a late first-half high of 48.73. Sellers were aggressive off the top, dropping PAY from 48.50 to second-half levels between 47.50 and 46.83. PAY has recorded an earnings-driven after-hours decline in three of the last 14 quarters tracked in our MT Pro database. Also, 100.0% of the time (three out of three times) the stock reversed in the opposite direction by the close of the next day's regular session compared to the extended hours "effective close." When it reversed, the price closed in the opposite direction on average by 5.4% (in three events) from the "effective close." The slim late evening decline recorded by PAY, combined with some still scarce history of downside reversals, would at least have us looking at potential early day long bets on the shares Friday morning. Early buyers may want to nibble at the shares near 46.75 to 46.90, levels that could see attempts to break back above 47 or higher.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.