Schaeffer's Trading Floor Blog

Stocks on the Move: WellCare Health Plans, Inc., Amazon.com, Inc., and Trulia Inc

WCG, AMZN, and TRLA are moving sharply in Friday's trading

by 7/25/2014 1:28 PM
Stocks quoted in this article:

U.S. markets are trading decidedly lower today, as a handful of poorly received earnings reports and new developments in Ukraine and Gaza spark a risk-off session. Among names making notable moves are healthcare concern WellCare Health Plans, Inc. (NYSE:WCG), online retailer Amazon.com, Inc. (NASDAQ:AMZN), and real estate stock Trulia Inc (NYSE:TRLA). Here's a quick roundup of how this trio of names is performing on the charts so far.

  • WCG has gapped 20% lower today to trade at $61.40, after the company last night reported an unexpected loss in its second quarter due to high Medicaid costs in Florida, and cut its full-year profit forecast in half. Adding to the bearish bias was a price-target cut to $70 at Wedbush, and downgrades to "market perform" from "outperform" at both Raymond James and Wells Fargo. Today's plunge -- the most of any name on the Big Board -- sent the stock straight to the short-sale restricted (SSR) list and into the red on a year-to-date basis. Plus, WellCare Health Plans, Inc. is now trading more than 25% below the consensus 12-month price target of $76.93, meaning another round of bearish brokerage notes could be on the horizon.

  • AMZN's steeper-than-expected second-quarter loss -- and subsequent 10% drop on the charts -- is being widely cited as a catalyst for today's broad-market sell-off. The news was met with a round of downwardly revised brokerage notes on the Street, and with 22 "buy" or better ratings levied toward the stock out of 27 covering analysts, additional downgrades may be in AMZN's future. Meanwhile, in the options pits, puts are trading at nearly eight times the intraday average this afternoon. However, with Amazon.com, Inc. also being on the SSR list, it's no surprise to find traders looking for alternate ways to bet bearishly on the stock. At last check, AMZN was trading at $323.25, after earlier tagging an intraday low of $314.76.

  • Bucking today's bearish bias is TRLA, which is up 2.8% to linger near $55.26 -- extending yesterday's 32% pop amid buyout buzz from sector peer Zillow Inc (NASDAQ:Z). The stock is now trading comfortably above the $50 mark -- which coincides with peak put open interest in the front-month August series of options -- suggesting a new layer of short-term support may be forming. Trulia Inc's two-day rally could have short sellers on edge. At present, more than 38% of the stock's float is sold short, and it would take more than seven sessions to cover, at TRLA's average daily trading volume.

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