Schaeffer's Trading Floor Blog

Highs & Lows: Yahoo!, DISH Network, and Smith & Wesson

YHOO, DISH, and SWHC soared to fresh highs

by 12/7/2012 1:53 PM
Stocks quoted in this article:

Markets remain mixed in afternoon trading, following this morning's varied economic reports. The scales are still tipped in the bulls' favor, though, as the number of equities at new highs is eclipsing those at lows. The NYSE currently tallies 62 new peaks and 15 bottoms, including a 13-month worst of $13.97 for Youku Tudou Inc (ADR) (NASDAQ:YOKU). Over on the Nasdaq, there are 37 tops and 18 fresh lows. Among the stocks charting notable moves are Yahoo! Inc. (NASDAQ:YHOO - 19.26), DISH Network Corp. (NASDAQ:DISH - 37.49), and Smith & Wesson Holding Corporation (NASDAQ:SWHC - 9.94).

  • Search engine giant YHOO scored a four-year best of $19.30 today, underscoring its positive price action. While gaining 19% in 2012, the shares have outpaced the S&P 500 Index (SPX) by 28 percentage points during the past 60 sessions. And there could be more upside around the corner, as this outperformer has been overlooked by analysts. Only five out of 24 brokerages consider YHOO worthy of a "buy" rating. Moreover, the consensus 12-month price target of $19.08 is a discount to today's fresh peak.

  • DISH enjoyed a roughly 1% bounce earlier today, which buoyed the security to the $37.70 mark -- its loftiest price since November 2007. As DISH looks to extend its 31% year-to-date climb, there appears to be a significant upswing of bullish sentiment in the options arena. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) reveals a 10-day call/put volume ratio of 20.10, which is more than six times greater than DISH's 50-day call/put volume ratio of 3.24.

  • In early action, gun maker SWHC snagged a five-year acme of $11.25 on initial reactions to its second-quarter earnings report. The rally was short-lived, however, as the stock fell some 8% after revealing lower-than-projected current-quarter earnings guidance. Prior to this report, there was a swell of optimism in the options pits, as evidenced by SWHC's 10-day call/put volume ratio of 6.59 on the ISE, CBOE, and PHLX. But this recent trend toward calls may not be as upbeat as it would initially appear. Short interest on the equity ballooned 21% during the most recent reporting period, and now makes up 17.6% of the available float. Therefore, it's possible that a portion of the recent call volume was due to hedging activity by the shorts. Despite today's pullback, the security is still sitting on an impressive 127% gain in 2012.

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