Schaeffer's Trading Floor Blog

Stocks to Watch Friday: Micron Technology, Inc., SINA Corp, and D.R. Horton, Inc.

Analyzing MU, SINA, and DHI ahead of tomorrow's trading

by 4/24/2014 5:35 PM
Stocks quoted in this article:

Momentum names that made notable moves on Thursday and could continue to do so into Friday's session include semiconductor concern Micron Technology, Inc. (NASDAQ:MU), Chinese online media company SINA Corp (NASDAQ:SINA), and homebuilder D.R. Horton, Inc. (NYSE:DHI). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Micron Technology, Inc. (NASDAQ:MU)

Micron Technology has been an unstoppable force on the charts since April 15, when the company announced its collaboration with Wave Systems Corp. (NASDAQ:WAVX) to strengthen user protection against data management threats. Today, MU shares went further into decade-plus-high territory, maxing out at $26.62, before settling the session 0.3% below breakeven, at $26.16. Over the past seven sessions, the shares have added 19.5%. Meanwhile, in MU's options pits, calls traded at an 66% mark-up to the average daily rate, and by the end of the session, call volume had outpaced put volume by a roughly 3-to-1 margin. In fact, seven of the day's 10 most active MU options were calls that expire within the next three months. It is possible that some of the day's call players were actually short sellers hedging against more upside, as short interest on Micron Technology currently accounts for a lofty 11.9% of the stock's float.

SINA Corp (NASDAQ:SINA)

SINA fell 3.1% today to close at $51.64, after being stripped of its online publication license for having "lewd and pornographic content" on its site. Option traders responded to the news by upping the bearish ante on the stock, which now faces a significant year-to-date deficit of 40%. Put volume spiked to nearly two times the average daily amount, with the weekly 4/25 50 strike seeing the most action on that side of the aisle. It seems as though speculators bet on a drop below the $50 level through tomorrow's close, as it appears a healthy portion of contracts at this strike were likely bought to open.

D.R. Horton, Inc. (NYSE:DHI)

D.R. Horton surged 8.3% today to close at $23.13, thanks to a fiscal second-quarter earnings report that beat analysts' estimates. While DHI made its way 3.6% above its year-to-date flat line, option traders exchanged roughly four times the expected daily amount of calls. Considering short interest on DHI represents 6.5 sessions' worth of pent-up buying demand, at the shares' average daily volume, some of today's heavy call activity could have come at the hands of short sellers picking up options-related insurance against continued gains.


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