Schaeffer's Trading Floor Blog

Highs & Lows: Baidu, Kroger, and H&R Block

BIDU fell to a new low, while KR and HRB scored fresh highs

by 12/6/2012 1:58 PM
Stocks quoted in this article:

U.S. stocks are holding onto their lead this afternoon, as investors divide their attention between upbeat unemployment data and the debt talks in Washington. Against this backdrop, the number of equities notching new highs slightly outweighs those at lows. At last check, there are 47 new peaks and 12 bottoms on the NYSE, while there are 22 tops and 24 fresh lows over on the Nasdaq. Among the stocks charting notable moves are Baidu.com, Inc. (ADR) (NASDAQ:BIDU - 88.80), The Kroger Co. (NYSE:KR - 26.94), and H&R Block, Inc. (NYSE:HRB - 18.08).

  • As the Securities and Exchange Commission (SEC) continues its inquiry into the Chinese offices of several big-name accounting firms, China-based Internet company BIDU retreated to the $85.96 mark this morning -- its worst price since September 2010. Technically speaking, the equity hasn't fared so well lately, diving roughly 24% since the beginning of the year, and lagging the broader S&P 500 Index (SPX) by more than 20 percentage points during the past two months. As a result of this weak price action, the security's Relative Strength Index (RSI) now resides at 29 -- in oversold territory. At last look, BIDU has shrugged off its early weakness, and is currently up about 0.8%.

  • Supermarket namesake KR has turned in a respectable run on the charts in 2012, outpacing the SPX by 17.5 percentage points during the past 60 sessions and adding 12.5% year-to-date. Although the brokerage crowd appears to be aware of this overall uptrend, there is still plenty of room for the stubborn skeptics to join the bulls. KR currently tallies 10 "strong buys" and seven "hold" or worse recommendations. Meanwhile, the consensus 12-month price target of $28.31 is a slim premium to KR's four-year acme of $27.11, touched in morning trading.

  • Tax preparation specialist HRB rallied to $18.40 today -- its loftiest peak since May 2010 -- after posting a smaller-than-predicted second-quarter loss. This news boosted the stock's 2012 gain to nearly 11%, which has been underscored by its 10-week and 20-week trendlines for roughly six months. However, options players seem to be betting on a short-term struggle for KR, as the equity's Schaeffer's put/call open interest ratio (SOIR) arrives at 5.67, indicating that puts outreach calls by more than five to one among options slated to expire within three months. What's more, this ratio ranks in the 100th percentile of its annual range, suggesting that near-term options players have never been more put-heavy throughout the last 12 months.

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