Schaeffer's Trading Floor Blog

Highs & Lows: Celgene, 3M, U.S. Bancorp, and Wal-Mart

CELG, MMM, USB, WMT, and ZNGA were among the equities charting notable moves today

by 10/5/2012 12:51 PM
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On the heels of a surprise drop in unemployment numbers for September, the bulls are controlling the action on Wall Street, as stocks look to secure healthy gains for the week. As a result, the number of equities rising to new annual peaks is far outreaching those backing to new lows. The NYSE has racked up a whopping 265 securities at annual highs, and only three new bottoms. Results are similar on the Nasdaq, where there are 132 new highs and just 17 lows -- most notably being Zynga Inc's (NASDAQ:ZNGA) guidance-induced, post-IPO worst of $2.21. Among the names making notable runs today are Celgene Corporation (NASDAQ:CELG - 80.52), 3M Co (NYSE:MMM - 94.99), U.S. Bancorp (NYSE:USB - 35.11), and Wal-Mart Stores, Inc. (NYSE:WMT - 75.33).

  • This morning, CELG was greeted with a pair of price-target hikes from Baird ($92 from $78) and Barclays ($87 from $75). These notes hoisted the biotech issue to an all-time best of $81.24, adding to its 2012 return of 17.7%. And there could be higher highs on the horizon, should the shares continue to exceed analysts' expectations. The average 12-month price target of $78.09 represents a $3.15 discount to today's new peak.

  • Moving on Dow component MMM has been busy recently, scrapping a deal to buy Avery Dennison Corporation's (NYSE:AVY) office products business, and bringing a patent infringement suit against RMO, Inc. (Rocky Mountain Orthodontics - Lingual Jet). Despite all this action, the stock prolonged its 15.5% year-to-date gain today, leaping to a 15-month acme of $95.00 just minutes ago. The options pits, however, maintain a skeptical view of the diversified technology company. MMM's Schaeffer's put/call open interest ratio (SOIR) arrives at 1.12, signaling that puts easily outnumber calls among options expiring within three months. This ratio ranks in the 96th percentile of its annual range, suggesting short-term speculators have been more put-heavy toward the stock just 4% of the time during the past year.

  • Banking concern USB has done quite well on the charts, jumping 30% since the beginning of the year, and soaring 46.6% on a year-over-year basis. In fact, the stock flexed some technical muscle earlier today, and climbed to the $35.46 mark -- its loftiest price in roughly four years. In light of this positive price action, optimism appears to par for the course in the options arena. USB's 10-day call/put volume ratio of 2.31 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 78th percentile of its annual range, signaling that traders on these exchanges have scooped up bullish bets over bearish at a faster-than-usual pace during the past couple of weeks. What's more, the security's 50-day call/put volume ratio of 1.93 lands 10 percentage points from an annual high reading.

  • The holiday shopping season is right around the corner, and WMT looks poised to get a bump form a rival. According to Credit Suisse, the retail giant (along with other big names in the sector) should take even more of the market share from J.C. Penney Company, Inc. (NYSE:JCP), as the latter continues to rework its image. With this news, WMT extended its 25% rise in 2012, grabbing a record best of $75.50. Even with such technical strength, the analysts are still leery of the stock. Twelve out of 23 analysts consider the equity a lukewarm "hold," while the consensus 12-month price target sits at $75.85, which is slight premium to WMT's all-time high.

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