Schaeffer's Trading Floor Blog

Highs & Lows: Visa, OpenTable, and Qihoo 360

V, OPEN, and QIHU leapt to annual peaks

by 1/7/2013 1:29 PM
Stocks quoted in this article:

Investors appear to be in a selling mood on Wall Street, reversing last week's upbeat momentum. Nevertheless, the number of equities at new highs is overshadowing those at new lows. There are currently 136 peaks and six bottoms on the NYSE, while the Nasdaq counts 81 tops and six lows -- most notably a more than two-year worst for MAKO Surgical Corp. (NASDAQ:MAKO) stemming from weaker-than-anticipated data for its surgical robot. Among the names charting notable moves higher are Visa Inc (NYSE:V - 157.43), OpenTable Inc (NASDAQ:OPEN - 54.00), and Qihoo 360 Technology Co Ltd (NYSE:QIHU - 32.50).

  • On the heels of Suntrust Robinson's price-target hike to $180 from $165, V rallied to the $158.77 mark, notching an all-time best for the credit-card name. The shares have enjoyed a solid uptrend on the charts, adding more than 56% during the past year. On a relative-strength basis, V has outpaced the broader S&P 500 Index (SPX) by more than 12 percentage points throughout the past 60 sessions. While the security continues to soar, bearishly minded traders line the options pits. V's 50-day put/call volume ratio of 1.11 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 90th percentile of its annual range, signaling speculators have rarely scooped up puts over calls at a faster pace during the past 10 weeks.

  • OPEN buoyed its year-over-year return to 35% today, touching a 16-month peak of $55.30 in the process. Despite this overall strength, analysts appear to be mostly skeptical toward the stock, as there are seven "hold" or worse suggestions out of 10 total ratings. Elsewhere on the Street, short traders are beginning to loosen their grip. Although short interest depleted by 7.1% during the most recent reporting period, it still accounts for a hefty 38% of the security's available float. While it could take nearly 19 days for all these pessimistic positions to unwind, OPEN could benefit from a short-covering situation if the shares extend their upswing.

  • Chinese Internet company QIHU has been a technical standout over the past year, rocketing some 131% since last January. Plus, in the past three months' time, the shares have outperformed the broader SPX by nearly 39 percentage points. And investors continue to be pleased with the stock, lifting it to the $33.13 level earlier today -- its loftiest price since April 2011. Considering this impressive price action, it's not surprising to find a glut of optimism in the options pits. Data from the ISE, CBOE, and PHLX reveals a 50-day call/put volume ratio of 3.47. This ratio arrives 1 percentage point away from an annual high, signaling that traders on these exchanges have rarely made bullish bets over bearish at a faster pace during the past year. But short sellers could be responsible for some of the recent call buying, employing these bullish contracts to hedge their bearish bets. Short interest rose 13% over the past month, and now makes up 21% of QIHU's float.

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