Tesla Motors Inc (NASDAQ:TSLA)
TSLA officially joined the Nasdaq-100 Index this morning, and promptly raced out to an all-time high of $133.26, before pulling back slightly to $129.32. The shares have been on fire for a while now, having nearly tripled in value this year alone. By comparison, the broader S&P 500 Index (SPX) is no match, lagging behind the electric auto company by more than 260 percentage points over the same time span.
Curiously, option traders have been betting on downside for TSLA. According to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 0.76 places in the 90th percentile of readings recorded in the past 52 weeks. Long story short, option traders have scooped up puts over calls at a faster-than-usual clip through the most recent 10 weeks. Moreover, the stock features a Schaeffer's put/call open interest ratio (SOIR) of 1.77, which ranks in its 96th annual percentile. This denotes the fact that short-term traders have rarely been as put-skewed as they are now, relative to what's happened in the past year.
Should the shares maintain their meteoric rise, a capitulation among the bears could add contrarian tailwinds to TSLA's sails.
Oracle Corporation (NYSE:ORCL)
The firm TSLA replaced in the Nasdaq-100 was ORCL, which today became a part of the New York Stock Exchange. So far, things are looking sunny for the tech interest, which is up over 2% to trade at $31.91.
Sentiment is fairly bullish toward ORCL. Twenty-one of 31 brokerages following the stock label it a "buy" or better. In addition, the consensus 12-month price target is $36.03, which represents a considerable premium to the current per-share price. If that's not enough, short interest dropped over 11% in the last two reporting periods, and now comprises just 1.2% of the equity's total float.
Today's advance notwithstanding, ORCL is a technical laggard. The shares have underperformed the SPX by nearly 11 percentage points through the last month; considered in and of themselves, they are down over 4% year-to-date. If ORCL continues to struggle on the charts, an outlook reversal by Wall Street or increased attention from the shorts could pressure the stock to lower depths.
ADT Corp (NYSE:ADT)
Later this week, William Ackman's Pershing Square Capital Management LP could be buying a major stake in ADT, the largest home security firm in the country. This speculation came out last Tuesday, sparking a one-day increase of 5.2%.
Option players have grown increasingly optimistic toward ADT of late, and the aforementioned rumors have done nothing to curb the enthusiasm. The stock's 10-day call/put volume ratio stands at a lofty 7.52, according to data from the ISE, CBOE, and PHLX. In other words, through the last two weeks, calls have been bought to open over puts at a pace faster than 7-to-1. This is especially impressive considering the ratio was a mere 0.25 at the beginning of July, meaning puts were being scooped up more quickly than calls.
On the charts, however, ADT has been anything but impressive. Year-to-date, the security name is down over 6% to trade at $43.59, and over the past 60 sessions, the equity has underperformed the broader SPX by close to 10 percentage points. In addition, the shares are facing a potential level of overhead resistance at their 20-week moving average. Should ADT continue to underperform, an unwinding of optimism among the option bulls could spell more losses for the security.
Dell Inc. (NASDAQ:DELL)
Finally, on Thursday morning, DELL will be holding an extraordinary shareholder meeting to vote on CEO Michael Dell's proposed $24.4 billion buyout. At the same time, activist investor Carl Icahn is urging investors to reject the proposal in favor of his counteroffer, which he believes offers more value. All this buyout talk has helped DELL -- which is currently perched at $13.22 -- mount a 30.4% advance in 2013.
Nevertheless, Wall Street remains skeptical. Among the 22 brokerages covering the stock, every single one rates the stock a "hold" or worse. Moreover, the consensus price target is a stone's throw away, at $13.94. If encouraging news comes out of Thursday's meeting, it may give another shot in the arm to DELL, prompting a round of upgrades and/or price-target hikes that could fuel the computer maker's already impressive climb.
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