Schaeffer's Trading Floor Blog

Highs & Lows: Time Warner, TiVo, and ConAgra Foods

TWX, TIVO, and CAG saw fresh highs

by 12/12/2012 2:05 PM
Stocks quoted in this article:

After wavering near breakeven around lunchtime, markets are headed north, thanks to the Federal Reserve's pledge to help the U.S. jobless rate by keeping interest rates low. Also, Wall Street is awaiting Fed President Ben Bernanke's mid-afternoon press conference. Against this backdrop, the number of stocks reaching new highs is easily surpassing the number of new lows. The NYSE tallies 103 peaks and 14 bottoms, while the Nasdaq counts 61 tops and 13 fresh lows. Among the stocks charting notable moves are Time Warner Inc. (NYSE:TWX - 47.63), TiVo Inc. (NASDAQ:TIVO - 12.49), and ConAgra Foods, Inc. (NYSE:CAG - 30.46).

  • Media and entertainment heavyweight TWX has brought its year-to-date ascent to 31.8% today, tagging a 10-year best of $47.90 in the process. The stock could see even more upside, should bearish options traders succumb to its strong price action. During the past two weeks, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 4.23 puts for every call. This ratio arrives at an annual high, meaning traders on these exchanges have never made more bearish bets over bullish during the past year. Plus, the Schaeffer's put/call open interest ratio (SOIR) checks in at 3.58, conveying that puts more than triple calls among options expiring within three months.

  • Moving on TIVO soared to a new annual high of $12.65, thanks to this morning's price-target hike from J.P. Morgan. On the charts, the DVR maker is having a terrific year, gaining 39% since January, and outpacing the broader S&P 500 Index (SPX) by a 29 percentage points during the past three months. As a result of this rally, though, the security's Relative Strength Index (RSI) is sitting at 79 -- in overbought territory -- which suggests the shares may be due for a bit a of a breather soon.

  • CAG enjoyed a roughly 3% rise to the $30.55 level this afternoon, marking its loftiest price since March 1999. In fact, since landing at its annual low of $23.64 on July 24, the shares have added almost 29%, relying on support from their 10-week trendline on a few occasions. But this technical breakout hasn't done much to dissuade skeptical options players from ramping up their positions. CAG's 10-day put/call volume ratio of 2.59 on the ISE, CBOE, and PHLX currently ranks in the 96th percentile of its annual range, indicating that bearish speculation has rarely been more prevalent during the past year.

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