Schaeffer's Trading Floor Blog

Highs & Lows: Yahoo!, Hewlett-Packard, and Activision Blizzard

YHOO, HPQ, and ATVI clocked new technical milestones today

by 11/13/2012 2:36 PM
Stocks quoted in this article:

After falling into the red right out of the gate this morning, most market indexes have muscled their way higher as we head into the final hours of the session. Despite the change of direction, the number of stocks dropping to new lows today is easily outstripping those finding new highs. At last check, the NYSE has 105 equities recording fresh bottoms, compared to 31 securities climbing to new tops, while the Nasdaq has 102 stocks falling to new nadirs, versus 16 meeting a new apex. Among those equities tagging notable milestones in today's session are Yahoo! Inc. (NASDAQ:YHOO - 17.83), Hewlett-Packard Company (NYSE:HPQ - 13.23), and Activision Blizzard, Inc. (NASDAQ:ATVI - 10.69).

YHOO found its way to a new annual high of $17.85 today, after the Internet issue announced it will begin renovations on its existing Yahoo Mail system in December. The stock has been in a steady uptrend since Marissa Mayer took over the helm in mid-July, ushered aloft by its 10-day moving average. Wall Street has yet to buy into YHOO's rebound, though. No fewer than 19 out of 25 covering analysts still maintain a "hold" or "sell" suggestion toward the stock, and the consensus 12-month price target of $18.74 is just a slight 5% premium to today's technical milestone. Furthermore, even YHOO shareholders appear to be wary, as evidenced by the recent appetite for protective puts.

Another day, another technical nadir for Dow component HPQ. This time, the stock hit the $13.07 level -- its lowest mark since October 2002. The poor price action comes on the heels of yesterday's bearish note from Barclays, in which the brokerage firm cut its price target for the stock by $2 to $14. The equity has now shed about 49% year-to-date. Despite the stock's struggles on the charts, short-term calls have been in focus, as evidenced by the equity's Schaeffer's put/call open interest ratio (SOIR). Specifically, the stock's SOIR of 0.71 not only shows that call open interest outweighs put open interest among options expiring in three months' time, but it also ranks in the 16th percentile of its annual range. In other words, near-term traders are more call-heavy than usual toward HPQ.

ATVI found its way to a new annual low of $10.56 this morning. Today's downward trajectory is just more of the same for a stock that's sitting on a year-over-year deficit of nearly 16%. More recently, the equity has been pressured southward under the weight of its 32-day moving average. Should ATVI continue to struggle, a round of downgrades and/or price-target cuts will only exacerbate its slide. The stock currently maintains 16 "strong buy" recommendations, compared to four "holds," and not a single "sell" to be found. Additionally, the average 12-month price target of $15.25 not only represents a bold 42.7% premium to ATVI's current perch, but also stands in territory the stock has not seen on a daily closing basis since Sept. 30, 2008.


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