Schaeffer's Trading Floor Blog

Highs & Lows: Amazon.com, AIG, Zillow, and Whole Foods Market

AMZN, AIG, Z, and WFM notched new peaks in today's trading

by 9/14/2012 1:16 PM
Stocks quoted in this article:

While today's market rally isn't as robust as Thursday's, stocks are still meandering higher. With the bullish winds blowing, new highs are topping new lows by an impressive margin. At the NYSE, 448 names have reached new peaks, while a mere half-dozen are touching new lows. Meanwhile, on the NASDAQ, 212 names are in new-high territory compared to 16 plumbing new lows. Among the unfortunate few is clothing retailer bebe stores, inc. (NASDAQ:BEBE - 5.16), which visited the $5.15 mark earlier today. Meanwhile, among the 660 equities hitting new positive milestones are: Amazon.com, Inc. (NASDAQ:AMZN - 261.98), American International Group, Inc. (NYSE:AIG - 34.95), Zillow Inc (NASDAQ:Z - 44.10), and Whole Foods Market, Inc. (NASDAQ:WFM - 98.50).

  • Father of modern online retailing AMZN skipped to a new high of $264.11 today, adding to its year-to-date gain of more than 50%. The shares have also outpaced the broader-market S&P 500 Index (SPX) by more than eight percentage points during the last two months. While analysts are in the bullish camp -- 23 of the 32 following brokers name the stock a "buy" or better -- options players are a touch more skeptical. In fact, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.33 suggests near-term puts outweigh calls. The ratio is also higher than 88% of the last year's readings, pointing to an atypical preference for put trading.

  • Today, the U.S. Treasury completed its sale of nearly 637 million AIG shares, meaning it is no longer the majority stakeholder. With this news at its back, the stock shot up to a new annual high of $35.42. The stock has gained more than 50% in 2012 so far, but options players remain unconvinced. During the last 50 trading days on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 60 puts have been bought to open for every 100 calls. While this may not seem like a put-heavy ratio, it is higher than 92% of the past year's data, suggesting that -- relatively speaking -- option players have rarely been more likely to buy puts.

  • Z has defied the curse plaguing recent IPO names and is up nearly 97% in 2012. While the stock is currently just below breakeven, it did tag a new high of $45.50 earlier today. The stock is now trading near the average 12-month price target among analysts, at $44.57. If the brokerage group begins to adjust this figure higher, the shares could follow suit.

  • Finally, despite a little ricotta-cheese issue, WFM is staring down the century mark, pegging a new record high of $99.60 today. With today's move, the stock has added almost 42% in 2012 so far. Some bears may expect $100 to act as a cap for the shares, however, as short interest grew by nearly 14% in the past month, bringing the short-interest ratio to 4.0. If these short sellers change their mind and head for the exits, a modest short-covering rally could be in the cards.

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