Schaeffer's Trading Floor Blog

Stocks to Watch Wednesday: Inc, JinkoSolar Holding Co., Ltd., and Joy Global Inc.

Analyzing SOHU, JKS, and JOY ahead of tomorrow's trading

by 4/8/2014 4:29 PM
Stocks quoted in this article:

Momentum names that made notable moves on Tuesday and could continue to do so into Wednesday's session include Chinese Web company Inc (NASDAQ:SOHU), solar power concern JinkoSolar Holding Co., Ltd. (NYSE:JKS), and mining equipment manufacturer Joy Global Inc. (NYSE:JOY). Here is a quick look at these stocks ahead of tomorrow's opening bell. Inc (NASDAQ:SOHU)

Although climbed 5.1% today to close at $62.13, the stock remains about 29% below the two-year peak of $87.68 it touched in early March. Interestingly, short interest has declined right along with SOHU's value. In fact, during the last two reporting periods, the number of shorted shares dropped 41.6% to 1.6 million. What's more, SOHU option bulls at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have made their presence known during the past two weeks, buying to open more than 11 calls for every put. The resulting 10-day call/put volume ratio of 11.19 ranks just 9 percentage points from an annual high, showing the current rate of call buying, relative to put buying, is much faster than usual. In today's options pits, SOHU calls outnumbered puts by a more than 2-to-1 margin.

JinkoSolar Holding Co., Ltd. (NYSE:JKS)

JinkoSolar enjoyed a day in the green, on news that the company signed a distribution agreement with PROINSO India. By the end of the session, the shares had regained 6.2% to trade at $29.00, after yesterday's 9% plunge -- which landed the stock on the short-sale restricted list. In the options pits, puts were the contracts of choice today, more than doubling the expected daily volume. The most sought-after option was the April 25 put, where it appears that a healthy number of speculators bought to open positions in expectation of JKS dipping below $25 for the first time this year.

Joy Global Inc. (NYSE:JOY)

Joy Global jumped 3.5% today to close at $60.76. Although the stock has climbed nearly 19% from its year-to-date low of $51.17, short interest increased 11.8% during the last two reporting periods, and now accounts for 24.1% of JOY's float. It would take close to 12 sessions to cover these bearish bets, at the equity's average pace of trading. Meanwhile, today, options activity on JOY spiked to roughly three times the average daily amount, with about two-thirds of the contracts changing hands on the call side. It is possible that some of this call activity -- particularly at out-of-the-money strikes -- came at the hands of short sellers hedging against more upside on JOY.

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