Schaeffer's Trading Floor Blog

Highs & Lows: Time Warner, Cree, and TASER

TWX, CREE, and TASR jumped to new highs

by 11/27/2012 1:16 PM
Stocks quoted in this article:

Despite a bout of upbeat economic data, stocks have yet to choose which side of breakeven to explore this afternoon. In this wish-washy action, however, the number of equities reaching new highs is outweighing those at new lows. On the NYSE, there are currently 80 new peaks and only nine bottoms -- including McMoRan Exploration Co's (NYSE:MMR - 8.56) three-year worst of $7.25. Meanwhile, the Nasdaq has counted 43 tops and 20 lows. Among the stocks charting notable moves are Time Warner Inc. (NYSE:TWX - 46.69), Cree, Inc. (NASDAQ:CREE - 33.22), and TASER International, Inc. (NASDAQ:TASR - 8.95).

  • Cable television conduit TWX channeled its recent technical prowess earlier today, leaping to a five-year best of $46.81. While this feat added to the equity's 28.7% year-to-date return, there could be more highs ahead if the recent exodus by short traders continues. Over the past two reporting periods, short interest fell 8.4% and now makes up 3.1% of the security's float. However, at TWX's average pace of trading, it would take more than one week to buy back all of these shorted shares, which could translate into a contrarian tailwind.

  • Semiconductor developer CREE secured a 14-month acme of $33.60 this morning, amplifying its considerable 51.2% 2012 return. Even though the stock is flexing its technical muscle, there is still plenty of negativity railed against CREE. Of the 26 analysts following the tech stock, 10 have doled out "hold" or worse ratings. Moreover, the consensus 12-month price target sits at $33.46 -- a discount to today's fresh high.

  • Speaking of positive price action, shares of TASR have been running steadily higher, springing up 74.2% since January, and outpacing the S&P 500 Index (SPX) by an impressive 54 percentage points over the past 60 sessions. In fact, just moment ago, the TASR tagged the $8.99 mark -- its loftiest peak in over four years. Considering this rally, it should come as no surprise to find a glut of optimism in the options arena. The stock's 10-day call/put volume ratio of 8.41 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is an uptick from its 20-day ratio of 5.69. But there could be a less-than-upbeat reason for this call-heavy activity, as short interest rocketed nearly 48% 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 simply to hedge their pessimistic positions.

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