Schaeffer's Trading Floor Blog

Highs & Lows: General Motors, FedEx, and Urban Outfitters

GM, FDX, and URBN leapt to annual peaks

by 1/10/2013 1:44 PM
Stocks quoted in this article:

Markets are hovering above breakeven this afternoon, pulling back from an earlier lead brought on by upbeat global economic data. Despite this faltering sentiment, however, the number of equities at new highs is far outreaching those at new lows. So far today, the NYSE has tallied 251 annual highs and four annual lows. Meanwhile, the Nasdaq has seen 134 annual highs and eight annual lows, most notably an earnings related 12-month nadir for Ascena Retail Group Inc (NASDAQ:ASNA). Among the names charting notable moves higher are General Motors Company (NYSE:GM - 30.30), FedEx Corporation (NYSE:FDX - 97.29), and Urban Outfitters, Inc. (NASDAQ:URBN - 42.53).

  • GM continues to enjoy a steady uptrend on the charts, boosting its year-over-year return to 30%, while outpacing the broader S&P 500 Index (SPX) by 19 percentage points during the past three months. In fact, just this morning, the equity drove to the $30.39 mark, scoring a new 18-month peak. And it looks like there's plenty of positivity in the options arena, as evidenced by the GM's 10-day call/put volume ratio of 4.60 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio arrives in the 84th percentile of its annual range, signaling traders on these exchanges have made bullish bets over bearish at a faster-than-usual pace during the past couple of months. Furthermore, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.39 sits in the 24th percentile, suggesting that near-term options players have been more call-heavy just 24% of the time during the past year.

  • Since hitting a multi-year low of $64.07 back in October 2011, FDX has been on the rebound, rising more than 51% in that timeframe. Adding to this technical turnaround, the delivery services issue tagged the $97.56 level earlier today, reaching its loftiest price since July 2011. Despite this rally, options players appear to be betting on a slowdown for the shares. During the past 10 days, traders on the ISE, CBOE, and PHLX have bought to open 2.59 puts for every call on the stock. This ratio arrives in the 98th percentile of its annual range, signaling speculators have rarely scooped up more bearish contracts over bullish during the past year. Meanwhile, short-term option players are negatively skewed, as well. FDX's SOIR of 1.39 indicates puts edge out calls among options expiring within the next three months. Plus, this ratio is higher than 81% of the past year's readings.

  • URBN got a boost this morning on its holiday sales results. Specifically, the trendy retailer said net sales for the two months ended Dec. 31 rose 15% over the same period last year, even though same-store sales dipped by 1%. This news sparked a wave of buying today, pushing the shares to an all-time best of $43.27. Looking closer at the technical backdrop, URBN has tacked on 60% since last January, and is up about 8% in 2013. Considering this overall uptrend, skeptical sentiment could unwind, especially if the stock continues to exceed analysts' expectations. There are 13 "buy" or better endorsements, compared to 10 "hold" or worse suggestions. Furthermore, the consensus 12-month price target rests at $41.08, which is a more than $2 discount to URBN's fresh peak.

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