Schaeffer's Trading Floor Blog

Highs & Lows: Advanced Micro Devices, Harmony Gold Mining, Paychex, and Sarepta Therapeutics

AMD, HMY, PAYX, and SRPT were among the equities charting notable moves today

by 8/31/2012 2:59 PM
Stocks quoted in this article:

Finally, he spoke, and the bulls listened. In his speech this morning, Federal Reserve Chairman Ben Bernanke said that he is open to more quantitative easing, which gave Wall Street something to cheer. As we enter the last hour of trading, stocks are comfortably north of breakeven, building upon their monthly gains. At last check, the number of equities reaching new peaks is easily surpassing those at new bottoms. On the NYSE, there are 108 securities at 52-week peaks, and just 12 lows. Meanwhile, the Nasdaq sees a different picture, as there are 43 annual highs and 12 fresh lows. Among the stocks making record-breaking runs today are Advanced Micro Devices, Inc. (NYSE:AMD - 3.63), Harmony Gold Mining Co. (ADR) (NYSE:HMY - 8.52), Paychex, Inc. (NASDAQ:PAYX - 33.24), and Sarepta Therapeutics Inc (NASDAQ:SRPT - 16.01).

  • Just moments ago, AMD retreated to the $3.60 area -- its worst price since August 2009. The equity hasn't fared so well on the charts lately, diving more than 31.5% since the beginning of the year, and lagging the broader S&P 500 Index (SPX) by nearly 40 percentage points during the past 60 sessions. As a result of this weak price action, the security's Relative Strength Index (RSI) now resides at 27 -- in oversold territory -- which suggests that the shares could be due for some upside in the near future.

  • HMY dropped to a more than three-year low of $8.08, falling in sympathy with fellow South African mining outfit Gold Fields Limited (ADR) (NYSE:GFI), which is battling a strike at its KDC mine. From a technical perspective, HMY has underperformed the SPX by nearly 22 percentage points during the past 60 sessions, and has lopped off 27.6% in 2012. However, the options arena appears to be divided. During the past 10 days, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 12.23 calls for every put. This ratio arrives in the 67th percentile of its annual range, signaling that the current preference for calls is slightly higher than usual. Meanwhile, the Schaeffer's put/call open interest ratio (SOIR) of 2.21 sits in the 96th annual percentile, suggesting that near-term options players have been more put-heavy just 4% of the time during the past year.

  • Next up, payroll provider PAYX jumped to a more than 16-month best of $33.44 this morning, boosting its overall technical picture in the process. The shares are currently sitting on modest 10% year-to-date rise, and a 24% year-over-year upswing. And there could be more ahead for PAYX, should the stubborn brokerage bears rethink their current positions. Only four out of the 22 analysts covering the stock maintain a "buy" endorsement, while the average 12-month price target sits at $32.15, which is a discount to today's new peak.

  • SRPT has enjoyed an extraordinary run recently, rocketing more than 222% since January. In fact, earlier today, the biotech issue surged roughly 20% to a new annual high of $16.32, extending yesterday's uptrend. This rally was sparked by a report from a Missouri television station that said the biotech issue's experimental drug to fight muscle weakness and loss of muscle tissue has shown positive signs in a clinical trial. Considering SRPT's explosive price action, it's not surprising to see a preference for bullish bets among options players, as evidenced by the stock's 10-day call/put volume ratio of 4.7 on the ISE, CBOE, and PHLX. On the other hand, this activity may not so upbeat after all. Short interest on the equity jumped a whopping 445% during the past month. With buy-to-open call volume and short interest rising in tandem, it's possible that short sellers are picking up optimistic options to hedge their pessimistic positions.

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