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

The major market indexes are higher this afternoon, thanks to upbeat data on factory activity and domestic auto sales. Among the equities in focus include casino concern Las Vegas Sands Corp. (NYSE:LVS), offshore driller Transocean LTD (NYSE:RIG), and mining firm Kinross Gold Corporation (USA) (NYSE:KGC), which have all attracted the attention of analysts.

  • LVS is bucking the broad-market trend higher, shedding 1.9% to $51.95 despite an upgrade to "buy" from "neutral" at ISI Group. Just yesterday, LVS traded notably higher on news that gambling revenue in Macau rose a year-over-year 21.1% in June, topping analysts' expectations. From a longer-term perspective, Las Vegas Sands Corp. has underperformed the broader S&P 500 Index (SPX) by more than 8 percentage points during the past month, and continues to struggle beneath its 10-day moving average. Nevertheless, short-term options traders have rarely been more call-heavy during the past year, as evidenced by the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.44, which stands just 1 percentage point from a 52-week low.

  • Moving on, RIG is also in the red, giving up 0.7% to $47.91. Pressuring the equity lower were a couple of bearish brokerage notes, after Bernstein trimmed its price target to $61 from $62, and Citigroup downgraded the shares to "neutral" from "buy." Of course, RIG is no stranger to skepticism on Wall Street. The stock's SOIR of 1.02 registers in the 92nd percentile of its annual range, implying that near-term options traders are more put-biased than usual. Plus, short interest swelled by 24.2% during the past month, and now represents 3.83 million Transocean LTD shares. On the charts, it's not difficult to discern the pessimism plaguing RIG, which has surrendered about 14% since hitting a near-term high of $55.79 in mid-May, ushered lower beneath its 10-day moving average.

  • Finally, KGC is down 2.9% at $4.95, after Jefferies downgraded the stock to "underperform" from "hold." In addition, the brokerage firm reduced its price target on Kinross Gold Corporation (USA) to $3.75 from $5.50, which would represent a 10-year nadir for the shares. So far in 2013, KGC has shed nearly half its value, falling in sympathy with gold futures, which suffered their worst quarterly loss on record. Against this backdrop, short interest skyrocketed nearly 82% during the past month, pointing to amplified skepticism. What's more, the shorts could be hedging their bearish bets with long call options. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open more than 10 KGC calls for every put during the past two weeks. The 10-day call/put volume ratio of 10.20 ranks in the 64th percentile of its annual range, hinting at a healthier-than-usual appetite for purchased calls over puts.

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.