Schaeffer's Trading Floor Blog
Stocks quoted in this article:

Momentum names that made notable moves on Tuesday and could continue to do so into Wednesday's session include semiconductor concern Applied Materials, Inc. (NASDAQ:AMAT), car rental service Hertz Global Holdings, Inc. (NYSE:HTZ), and coal producer Arch Coal Inc (NYSE:ACI). Here is a quick look at these stocks ahead of tomorrow's opening bell.

Applied Materials, Inc. (NASDAQ:AMAT)

Applied Materials jumped to a fresh six-year high of $21.45 today, and finished the session with a 4.4% gain at $21.42, thanks to a "buy" rating and $28 price-target initiation at Jefferies last night. Meanwhile, call volume spiked to more than three times the average daily amount, and outnumbered put volume by a roughly 4-to-1 margin. Today's preference for calls over puts echoes a longer-term trend in AMAT's options pits. In fact, the equity sports a 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 5.22, with more than five calls bought to open for every put during the past four weeks. However, given that short interest represents more than a week's worth of pent-up buying demand (at the shares' average daily volume), some of the recent call buyers could actually be short sellers in disguise, hedging against more upside. If AMAT continues to make headway on the charts, a short-squeeze scenario may be in the cards, which could create additional tailwinds.

Hertz Global Holdings, Inc. (NYSE:HTZ)

Hertz shares have been climbing higher since the company announced yesterday morning that Brian P. MacDonald has been appointed chief executive officer of Hertz Equipment Rental Corporation (HERC). Today, the equity tacked on an additional 0.6% to close at $29.99, but not before hitting a new record high of $30.00. In the options pits, speculators scooped up two times the expected daily amount of calls, primarily focusing on strikes that expire within the next three months -- including a roll out from the June 29 strike to the July 29 strike, according to Trade-Alert. Going back 10 trading days, HTZ sports a top-heavy ISE/CBOE/PHLX call/put volume ratio of 8.61, which ranks in the 80th annual percentile. In other words, bullish bets have been in heavier-than-usual demand (compared to their bearish counterparts) during the past two weeks. In other fundamental news, Hertz is tentatively scheduled to report fiscal first-quarter earnings next Monday.

Arch Coal Inc (NYSE:ACI)

After falling 6.4% today to close at $3.23 -- and earlier tagging a 14-year low of $3.21 -- Arch Coal is now down 9.3% week-to-date, on news of the Environmental Protection Agency's proposed 30% reduction in carbon dioxide emissions from existing power plants by 2030. While calls have been the contracts of choice over the past four weeks -- with ACI's 20-day ISE/CBOE/PHLX call/put volume ratio of 22.92 showing calls bought to open have outnumbered puts by a roughly 23-to-1 margin -- puts were at the forefront of today's activity. To be specific, 15,000 puts were exchanged -- nearly five times the daily norm -- while less than 5,400 calls changed hands. The overwhelming majority of the puts crossed at the October 4 strike, where it appears speculators placed bets on ACI continuing to move south of $4 through October options expiration.

APP 6 Months Free

permanent link

Partner Center

© 2015 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email:

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by | Data delayed 15-20 minutes unless otherwise indicated.