Schaeffer's Trading Floor Blog

Stocks to Watch Thursday: Alcoa Inc, Halliburton Company, and AOL, Inc.

Analyzing AA, HAL, and AOL ahead of tomorrow's trading

by 4/16/2014 4:40 PM
Stocks quoted in this article:

Momentum names that made notable moves on Wednesday and could continue to do so into Thursday's session include aluminum producer Alcoa Inc (NYSE:AA), oil-and-gas concern Halliburton Company (NYSE:HAL), and Internet issue AOL, Inc. (NYSE:AOL). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Alcoa Inc (NYSE:AA)

Alcoa scored a fresh two-year high of $13.44 today, before closing the session with a 2.8% gain at $13.42. The stock has been on the up-and-up for the past three trading days now, adding about 7% to its value during this time period. Stepping back even further, AA has outperformed the broader S&P 500 Index (SPX) by more than 49 percentage points during the past six months -- so it may come as a surprise that AA's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.00 ranks the highest of all similar readings from the past year. This indicates that speculators have bought to open puts, relative to calls, at an annual-high rate during the past two weeks. Widening the time frame to 10 weeks shows a similar trend, as AA's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.55 also ranks above all other readings taken in the past year. With that being said, a continuation of Alcoa Inc's upward trajectory may cause bearish bettors to hit the exits, which could give the shares an additional boost.

Halliburton Company (NYSE:HAL)

Halliburton explored record-high territory at $60.74 earlier today, after receiving a $5 price-target lift to $60 at Morgan Stanley. Although the stock fell slightly below this technical milestone by the end of the session, it still finished 0.9% above breakeven, at $60.50. Option players responded enthusiastically today, as call volume more than tripled the typical amount traded in one session. What's more, eight of the 10 most active options of the day were short-term calls, and at the top of the list was the May 62.50 strike, where more than one-fourth of HAL's total options volume crossed. On the fundamental front, HAL is scheduled to report first-quarter earnings before next Monday's open.

AOL, Inc. (NYSE:AOL)

AOL spent its second consecutive day in the green, after announcing a "new premium video experience" for its home page. Today, the stock jumped 4.4% to $44.36, marking a two-day uptick of 6.6%. Subsequently, calls changed hands at a rate that nearly doubled the average norm, with the four most active options being of the soon-to-expire front-month variety. Considering short interest accounts for 8.1% of AOL's available float, perhaps some of today's call activity can be attributed to short sellers hedging against additional upside.


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