Earlier today, sporting-goods behemoth Dick's Sporting Goods (DKS: sentiment, chart, options) announced second-quarter earnings. The company reported net income of 35 cents per share for the quarter, 6 cents less than last year's same-quarter results. Adjusted earnings, excluding costs associated with the integration of Golf Galaxy, totaled 39 cents per share. These results topped the consensus estimate by 3 cents and the company's own predicted range of 34 to 38 cents per share. As for the third quarter, the company predicted earnings of 4 to 8 cents per share. For the full year, DKS expects earnings of $1.27 to $1.36 per share. The lower end of this range is a penny better than the Street's estimate.

The stock is currently 11.6% higher, and has taken out potential resistance at the round-number 20 level. This news is welcomed by the struggling stock, but there is a problem: DKS's downtrend has allowed several layers of potential resistance to work into the picture. During the past 52 weeks, DKS has shed 40% - belying the bullish sentiment felt from the Street.

Currently, DKS's Schaeffer's put/call open interest ratio of 0.67 is lower than 73% of those taken during the past 52 weeks. There is a chance for upgrades, as 7 analysts rate DKS a "hold." Of course, the remaining 11 analysts rate the firm a "buy" or better leaving the door open for downgrades. With the stock's 10- month moving average bearishly crossing its 20-month counterpart a couple of months ago, it appears that there could be further downside in store. If a downtrend follows, we could see the optimism unwind and push the stock lower.