Schaeffer's Trading Floor Blog

Highs & Lows: ConAgra Foods, Dell, Virgin Media, and Zillow

CAG, DELL, VMED, and Z were among the equities charting notable moves today

by 9/20/2012 2:15 PM
Stocks quoted in this article:

Stocks are seeing red this afternoon -- although only slightly below breakeven -- as Wall Street chews on poorly-received jobless numbers and weaker-than-projected manufacturing data of China. Despite this bearish tempo, there are more equities posting new annual highs today than those suffering fresh lows. At last look, the NYSE has seen 100 fresh peaks and only nine lows. Meanwhile, the Nasdaq tallies 58 annual highs and 15 lows. Among the stocks making notable runs today are ConAgra Foods, Inc. (NYSE:CAG - 27.45), Dell Inc. (NASDAQ:DELL - 10.49), Virgin Media Inc. (NASDAQ:VMED - 30.51), and Zillow Inc (NASDAQ:Z - 46.20).

  • CAG this morning unveiled a better-than-expected fiscal first-quarter report, and soared to a near six-year acme of $27.75, as a result. This rally helped the stock out of its 2.8% year-to-date deficit, and contributed to its healthy 11.3% year-over-year gain. The bearish sentiment backdrop for the foods giant could unravel, should the shares continue to exceed the consensus view. There are four "strong buys," one "buy" and seven lukewarm "holds." Furthermore, the average 12-month price target of $28.08 is a slight premium to CAG's fresh high.

  • Next up, global tech company DELLhas been slipping on the charts, losing 28.6% in 2012, and lagging the broader S&P 500 Index (SPX) by nearly 22 percentage points during the past 60 sessions. In fact, earlier today, the stock peeled back to the $10.30 mark -- its lowest point since April 2009. Regardless of this overall downtrend, calls have been the options of choice recently, as evidenced by the stock's 10-day call/put volume ratio of 1.72 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). However, there could be a less-than-bullish reason for this call-heavy activity, as short interest rose 17.3% 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 bullishly slanted options simply to hedge their pessimistic positions.

  • VMED prolonged its impressive 41.8% year-to-date upswing today, tagging a 14-month peak of $30.55 just minutes ago. On a relative-strength basis, the entertainment and communications mogul has outpaced the broader SPX by more than 15 percentage points throughout the past three months. And as a result, the stock's Relative Strength Index (RSI) now resides at 79, which is in overbought territory. This suggests that VMED may be due for a pullback in the near future.

  • As the housing market continues to show signs of recovery, real-estate search site Z is also benefitting from the news. Just before lunchtime, the shares charged to a post-July 2011 IPO best of $46.86. Since the beginning of the year, Z has enjoyed an exemplary 102% return, and could see even loftier prices if pessimistic options traders rethink their positions. During the past 10 days, speculators on the ISE, CBOE, and PHLX have bought to open 5.88 puts for every call. Plus, the stock's Schaeffer's put/call open interest ratio (SOIR) arrives at 1.76, signaling that puts easily outnumber calls among options expiring within three months. This ratio registers in the 92nd percentile of its annual range, suggesting that near-term options players have been more put-heavy toward Z just 8% of the time during the last year.

Here are some additional articles of interest:

Option Trends: General Motors, Priceline.com, and Qualcomm
Option Volume Soars as CSX Sinks

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