Schaeffer's Trading Floor Blog

Stocks to Watch Tuesday: Herbalife Ltd., QUALCOMM, Inc., and Under Armour Inc

Analyzing HLF, QCOM, and UA ahead of tomorrow's trading

by 3/17/2014 5:03 PM
Stocks quoted in this article:

Momentum names that made notable moves on Monday and could continue to do so into Tuesday's session include nutritional supplements marketer Herbalife Ltd. (NYSE:HLF), telecom name QUALCOMM, Inc. (NASDAQ:QCOM), and sports apparel maker Under Armour Inc (NYSE:UA). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Herbalife Ltd. (NYSE:HLF)

HLF continued to slide in the wake of the Federal Trade Commission's recently launched investigation, with the shares shedding 7.8% to finish the day at $53.50. In the process, the stock closed below its 80-week moving average for the first time since early July. In the options pits, both calls and puts traded at more than twice their average daily rates, and the in-the-money March 56 put saw significant buy-to-open activity. Puts have been the options of choice among traders of late (relatively speaking), as Herbalife's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.90 ranks in the top one-fifth of all readings from the last year.


QCOM finished Monday's session 3.1% higher at $77.02, and in afternoon trading hit a near-14-year high of $77.31. Among the options crowd, calls traded at more than twice their normal daily pace, and also more than quadrupled puts. However, in recent sessions, it's puts that have been scooped up at a faster-than-usual pace. Specifically, QUALCOMM's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.57 registers in the 70th percentile of its annual range.

Under Armour Inc (NYSE:UA)

UA raced to an all-time high of $121.43 on Monday after announcing a two-for-one stock split, and finished the session 2% higher at $119.67. Call volume closed at a 57% mark-up to its daily average, led by both buy- and sell-to-open activity at the near-the-money July 120 call. Elsewhere, despite outpacing the S&P 500 Index (SPX) by nearly 43 percentage points during the last 40 days, Under Armour is heavily shorted. Specifically, 10.5% of the stock's float is sold short, which represents a week's worth of pent-up buying activity, at UA's average daily volume. Should the shares continue to rally, a short-squeeze situation could ensue, adding fuel to the equity's fire.

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