Schaeffer's Trading Floor Blog
Stocks quoted in this article:

The broad-market indexes are treading above breakeven, as Wall Street eagerly awaits tomorrow's Federal Open Market Committee (FOMC) minutes. Meanwhile, among the equities in focus are social networking site Facebook Inc (NASDAQ:FB), video game retailer GameStop Corp. (NYSE:GME), and deepwater drilling concern Transocean LTD (NYSE:RIG), which have all attracted the attention of analysts.

  • Janney initiated a "buy" rating and a price target of $50 for FB ahead of today's session. On the charts, FB has climbed 91% on a year-over-year basis, and tagged an all-time high of $39.32 on Aug. 5. However, since hitting the aforementioned high, the stock has tumbled 2.8% to its current perch at $38.20. Still, according to FB's Schaeffer's put/call open interest ratio (SOIR) of 0.55, calls nearly double puts among options expiring in three months or less. This ratio ranks higher than just 8% of all other such readings taken in the previous 12 months, indicating FB's short-term speculators have rarely been more call-heavy than they are now. Should Facebook Inc continue to struggle, this heavy call open interest could translate into options-related resistance down the road, as these bullish bets unwind.

  • As GME prepares to enter the earnings confessional on Thursday morning, Oppenheimer increased its price target for the stock to $60 from $50. Over the past year, GME has tacked on a whopping 147.2%. Furthermore, the stock reached a new five-year high of $51.36 on Aug. 1, before consolidating near its current price of $48.18. Although short interest on GME decreased 11% in the latest reporting period, it still represents an impressive 21.5% of the stock's available float. In the event of an extended rally, it would take short sellers nearly 11 sessions to cover their bearish bets -- insinuating a healthy amount of sideline cash. This means GameStop Corp. could end up benefiting from short-covering activity, which could serve as a contrarian tailwind for the stock.

  • Finally, RIG is trending 1.5% higher at $47.24, despite several bearish brokerage notes. Specifically, UBS slashed its price target to $49 from $63, and lowered its rating to "neutral" from "buy," while Susquehanna decreased its price target to $53 from $55. Technically, RIG stands a modest 5.6% higher year-to-date, and has struggled even more in the past three months, dropping almost 12%. With that being said, the brokerage bunch is leaning toward the bearish side, as today's pessimistic analysts are just the latest to downwardly adjust their positions. From the 23 analysts weighing in, RIG has received 11 "holds" and one "strong sell" suggestion, compared to 11 "buy" or better endorsements. On the other hand, the stock's 12-month price target of $57.23 represents expected upside of 21.1% -- leaving the door wide open for a round of price-target cuts to pressure the shares further south, should Transocean LTD's technical struggles continue.

permanent link
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.