Schwab Network on $STX (Oct 27, 2026)

Seagate's quarterly results will give us insight into the chip business , as the company is set to release its earnings report today. Revenue is expected to be $4.11 billion.

Adjusted earnings per share are expected to be $7.44. The chipmaker's shares have shown some weakness relative to the overall technology sector, but are still up more than 124 percent year-to-date.

Keep in mind, Western Digital and Seagate are a bit different from Micron and SanDisk in terms of product offerings,

Seagate is doing slightly better than its main competitor, Western Digital.

You mentioned that the stock is still significantly up in 2026, but we are down more than 40 percent from the all-time highs seen in June. It was an elevator ride to that all-time high of $1,145. Seagate reached that peak in June.

We've seen declines, ups and downs with the overall market , but now we're seeing another decline for Seagate Technologies.

A few weeks ago, it broke below the 50- day simple moving average. We are now below the 200-day simple moving average, which we have not fallen below for more than a year and a half.

So this is a concern for investors ahead of this report. Our RSI is now near 34. Despite the slight rise in the stock today, it is almost oversold.

Anything near 34, anything below 30 is considered oversold. So we are just above that level. We will see if we can regain the upward momentum in the RSI.

Now we will start looking at some levels that investors should pay attention to. You should remember that we are below the 685 level.

The stock looks likely to open near 655 this morning. So that 200- day simple moving average of 685 could be a small obstacle on the way to the upside.

However, when you look at the volume profiles, it may be necessary to look at the 690 level. This is exactly the level, which is just above the 200- day simple moving average. And then you start looking at support.

Where will my support level be? Perhaps the area around 510 will serve as the first node of heavy volume. However, the upside to the stock's current position is quite uncertain.

We definitely need a good report to reach the upside resistance level of Seagate. Maybe Seagate is also at that risk. So if the stock drops further, I want to protect myself a little before that happens.

You mentioned that they are expecting revenue of $4.11 billion. This is a neutral to bullish strategy, where out-of-the -money puts are sold vertically.

I exercised the weekly option on October 30th, which has only 3 days left until expiration. This is a sample trade based on income. If you are bullish on this stock after earnings , we will sell 620 puts.

This is about $35 below where the stock opened at $655. And to control risk, since this is income time, it's better to be careful. There are many types of incident risks. Buy a 600 strike put.

So, short a $20 wide neutral to bullish put vertical.

If it opens near 655, you will get about $6 in credit. That's what you can earn, $600 per spread for a risk of $1,400 , but it's well below the $600 level.

This brings your break-even point down to 614. This is more than 6% below Seagate Technologies' current share price. The probability of that short 620 put option being out of the money is, uh, that's about 63%.

So, you are more likely to succeed by risking more than you can earn, but you have a good safety net before you face any major losses.