Schaeffer's Trading Floor Blog

Stocks to Watch Friday: Amazon.com, Inc., Strayer Education Inc, and Yamana Gold Inc. (USA)

Analyzing AMZN, STRA, and AUY ahead of tomorrow's trading

by 6/19/2014 4:58 PM
Stocks quoted in this article:

Momentum names that made notable moves on Thursday and could continue to do so into Friday's session are e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN), academic issue Strayer Education Inc (NASDAQ:STRA), and commodity concern Yamana Gold Inc. (USA) (NYSE:AUY). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Amazon.com, Inc. (NASDAQ:AMZN)

A day after unveiling a new 3-D smartphone, AMZN backpedaled 2.2% to $327.00. It appears options traders utilized calls to gamble on a short-term ceiling for AMZN, with sell-to-open activity detected at the June 330, 335, and 340 calls. By writing the calls to open, the sellers expect AMZN to remain south of the selected strike through tomorrow's close, when front-month options expire. In light of today's dip, the stock now sits nearly 18% lower year-to-date, yet the analyst crowd remains optimistic. In fact, AMZN boasts 21 "strong buys" and four "buy" ratings, compared to just four "holds" and not a single "sell" suggestion. Should the security extend its retreat, a flood of downgrades could exacerbate selling pressure on the shares.

Strayer Education Inc (NASDAQ:STRA)

Education stocks were smacked lower today, after Corinthian Colleges Inc (NASDAQ:COCO) warned of a major liquidity shortage, pushing the shares deeper into penny-stock territory and to a record low. In sympathy, sector peer STRA swooned 4.1% to settle at $53.30, but remains 55% higher year-to-date. There were plenty of bears likely cheering the pullback; short interest accounts for 16.8% of STRA's total available float, representing nine sessions' worth of pent-up buying demand, at the stock's average pace of trading. Likewise, not one of the 10 covering analysts deems STRA worthy of a "buy" or better rating.

Yamana Gold Inc. (USA) (NYSE:AUY)

In the wake of yesterday's Federal Reserve announcement, AUY and its sector comrades followed gold futures into the black. Specifically, the stock advanced 6% to $8.80, and option traders gambled on more upside for the shares. Daily call volume ran at three times the average pace, and speculators showed an affinity for short-term options, in particular. The equity's 30-day at-the-money implied volatility popped 3.6% to 39.4%, with potential buy-to-open activity detected at the July 8 and 9 calls. By purchasing the calls to open, the traders expect AUY to extend its climb through the close on Friday, July 18, when the soon-to-be front-month options expire.


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