Schaeffer's Trading Floor Blog

Highs & Lows: Arena Pharmaceuticals, J.C. Penney, and Dell

ARNA, QCOR, and DPS cruise to new highs, while JNPR, JCP, and DELL dip to new lows

by 6/12/2012 3:04 PM
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Although the major indexes have maintained their initial gains in afternoon trading, there are still plenty of equities bucking the broader trend higher to explore new-low territory. Currently, the New York Stock Exchange (NYSE) has just 24 securities at new highs, compared to 44 at new lows, while the Nasdaq shows 25 stocks at fresh peaks, versus 40 at new lows. Among the stocks touching 52-week highs or lows in today's trading are Arena Pharmaceuticals, Inc. (ARNA), Questcor Pharmaceuticals, Inc. (QCOR), Dr. Pepper Snapple Group Inc. (DPS), Juniper Networks, Inc. (JNPR), J.C. Penney Company, Inc. (JCP), and Dell Inc. (DELL).

Notable Stocks at Annual Highs

  • Arena Pharmaceuticals (ARNA - 7.64) has added 9% today, boosting the stock to a new annual high of $7.75. The biotech firm has put forth a stellar technical performance lately, boasting a year-over-year gain of a whopping 457%, as well as a year-to-date gain of 309%. Even so, the equity has no lack of pessimistic attention. Although short interest on ARNA declined by almost 11% over the past two reporting periods, these bearish bets still make up a hefty 22% of the equity's float. What's more, only four of the 10 analysts following the security have issued "strong buy" ratings, while the remaining six maintain "hold" or worse recommendations. From a contrarian standpoint, this leaves plenty of room for future upgrades, which could propel ARNA higher.
  • Questcor Pharmaceuticals (QCOR - 47.94) has followed the footsteps of sector peer ARNA today, boasting a new high of $48.50. The pharmaceutical giant has gained a staggering 90.5% on a year-over-year basis, and has outpaced the broader S&P 500 Index (SPX) by more than 31% during the past three months. Given the stock's technical prowess, it makes sense that all eight of the analysts covering QCOR have doled out "strong buy" endorsements. The security also seems to be basking in the glow of some bullish attention on the options front, as well. The 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio for QCOR sits at 1.65, signaling that calls bought to open have comfortably outstripped puts in the past few months.
  • Dr. Pepper Snapple Group (DPS - 43.33) was upgraded to "outperform" from "market perform" at Wells Fargo today, boosting the beverage behemoth to a new high of $43.76. DPS has advanced by nearly 10% so far this year, and has outperformed the broader SPX by over 18% during the last 60 days. Currently, the equity remains perched atop its 10-week moving average, which has served as support since mid-March. Meanwhile, traders on the ISE/CBOE/PHLX have taken a shine to the stock's calls, as it sports a 20-day call/put volume ratio of 3.59. In other words, speculators have bought to open more than three calls for every put during the last 20 sessions.

Notable Stocks at Annual Lows

  • Juniper Networks (JNPR - 16.53) was 2.1% higher in premarket trading, after announcing $1-billion stock repurchase plan. However, that didn't stop the equity from tagging a new low of $16.33 in the early hours of trading. It's not surprising that pessimism abounds on the network infrastructure provider, considering its 52-week decline of more than 45%. As evidenced by the security's 10-day ISE/CBOE/PHLX put/call volume ratio of 2.09, puts bought to open have more than doubled calls during the past two weeks. This ratio sits just two percentage points away from a yearly peak, indicating that traders have been snapping up puts over calls at an almost annual-high clip. Furthermore, JNPR sports just nine "buy" or better endorsements, with the remaining 19 maintaining middling "hold" ratings.
  • J.C. Penney Company (JCP - 23.54) just can't catch a break these days. The retailer has yet to recover from its dismal quarterly earnings showing nearly a month ago, and has swallowed a year-to-date loss of more than 32% as a result. Adding insult to injury, JCP fell another 2% this morning, touching a new yearly low of $23.14. This bag of negative data has likely enticed a number of skeptics, as short interest on the equity spiked by more than 28% during the most recent reporting period, and now makes up an impressive 26% of JCP's available float. Meanwhile, analysts aren't feeling the love for the security, either, as just four have deemed it worthy of a "strong buy," while 10 "hold" or worse recommendations have been bestowed upon the stock.
  • Dell Inc (DELL - 11.90) has managed to claw its way out of the black today, but not before slipping to a new low of $11.68 this morning. But this isn't the first sign of trouble on the charts for the computer giant. The stock dropped sharply on May 23, after the firm offered a disappointing revenue forecast. This plunge merely exacerbated DELL's technical woes, as the equity now sits on a 52-week loss of almost 25%. What's more, the stock has lagged the SPX by north of 26% during the past 60 sessions. However, the security's Relative Strength Index (RSI) is hovering near oversold territory at 18, suggesting the stock could be due for a breather.

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