Entertainment concern Nielsen Holdings (NYSE:NLSN) has been chopping lower this year, pressured by its 100-day moving average, and just recently bottoming out at an all-time low right beneath familiar support at the $20 region. Since this late-October low, the stock has been in rally mode, looking to clock its third straight win today, as investors look ahead to the media name's third-quarter earnings release, due out before the open on Thursday, Nov. 7. However, the shares just ran straight into pressure at their 80-day moving average, which has signaled downside for the equity in the past.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, NLSN has come within one standard deviation of this trendline 14 times in the last few years. During these last 14 signals, the equity was higher one month later only 30% of the time, with an average one-month loss of 5.82%. At its current perch of $20.86, a similar move would knock NLSN to $19.65 -- a new all-time low for the equity.
While Nielsen's last three post-earnings moves have been positive, looking further back reveals five consecutive next-day drops, including a 25.2% dip in July 2018. This time around, the options pits are pricing in a 14.2% swing, which more than doubles the equity's average 7% post-earnings move from the past two years.
Should NLSN head back down the charts, a round of analyst bear notes could also be on the horizon. In fact, six of the seven in coverage say the stock is a "buy" or better. Plus, the consensus 12-month price target of $27.09 is at a substantial 30% premium to current levels.
Short sellers have been jumping ship, with short interest down 16.6% in the last two reporting periods, leaving plenty of room on the bearish bandwagon. Right now, short interest accounts for only 3.3% of the stock's available float.
The options pits, on the other hand, have been leaning toward bearish bets ahead of the firm's earnings release. At the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) 1.86 puts have been bought for every call during the past 10 days. This ratio sits higher than 77% of all other readings from the past year, suggesting this preference for puts is unusual.