Hamzei Analytics Founder Would Wait Until After Earnings To Trade Twitter

Fari Hamzei recently said he would wait for Twitter Inc (NYSE: TWTR) to report earnings, and trade on the day after.

The founder of Hamzei Analytics on Wednesday joined Benzinga’s #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

When questioned about how to play the earnings, Hamzei said he “won’t trade into it, won’t hold to it,” but rather trade “the next day after,” because the charts are not saying anything.

He explained, “last time they missed, as you know… The volatility is not giving us any signals, [it is] very tight, super super tight. It’s been that way since […] pretty much after the drop. To look at it since last earnings –late October, to look at that gap now…since then we’ve had very low volatility. So there’s no signal there… CIs are very flat, and also you can see we are with 50 bar and 200 bar.”

Hamzei then asks, “what if they miss this time, again?” To be safe, he would buy the next day, but for those who desperately want to be in for the earnings, he recommended playing both ends, both verticals: call spread and put spread. “But be careful [with call spreads] (…) don’t overpay, because you can get sucked in,” he warns. “If you overpay (…) you’re not going to be able to recover what you lose on the other side.”

Hamzei aslo discussed Twitter’s long-term story and the sentiment around it. “Obviously I have to pay attention to sentiment, but, the biggest ‘unknown’ about Twitter is not the chart, it’s the fundamental story, which is more innovation; you can’t see that in a chart.”

Check out the full interview below: