Watch Under Armour (UA) Tomorrow.

Under Armour Inc. has finished filling the gap today. After hitting intraday high of $49.00, the stock sharply retraced to the lows of the day of $47.52 before finishing the day below the opening price of $48.50 at $48.20.

The run up has been fueled in part by retailer's better than expected earnings results but this stock also has an eye popping 36% of the float short. Some of the shorts may have been covering but the real action is the bullish investors who have been piling in before the all important Dick's Sporting Goods (DKS) earnings tomorrow before the bell with the conference call scheduled at 10:00 AM. A lot hinges on DKS earnings report for UA. DKS is one of the largest retailers of UA and they will set the tone for redemption or spiral into the depth of oblivion.

Today's action showed that there is some stiff overhead resistance above $49 for those people who took it on the chin holding this stock that are waiting to get out. However there is one way to over come this selling pressure. Dick's Sporting Goods earnings report tomorrow.

I tend to think that Dick's will report better than expected earnings and most of the retail sectors were over sold into that terrible April. Dick's is no exception and that chain should be able to provide some interesting numbers tomorrow.

I am heavily leaning into long call options. I have 150 contracts of July $50 calls. I anticipate that if Dick's reports favorable earnings accelerated by robust UA sales, that will be the redemption that UA needs to move up. After that less than stellar forward guidance at the recent quarterly earnings report from UA, this will show that UA is still a robust grower and deserves the lofty PE and valuation.

Good luck everyone!