Schaeffer's Trading Floor Blog

Highs and Lows: AT&T, Altria Group, and Walt Disney

T, MO, DIS, EXPE, and SWKS arrive at new highs and CMVT backpedals to new-low territory

by 6/7/2012 1:22 PM
Stocks quoted in this article:

Among the stocks reaching technical milestones (of a positive or negative variety) in today's trading are AT&T Inc. (T), Altria Group, Inc. (MO), The Walt Disney Company (DIS), Expedia Inc (EXPE), Skyworks Solutions Inc (SWKS) and Comverse Technology, Inc. (CMVT).

Ben Bernanke may have squashed rumors of further quantitative easing, but China's decision to lower interest rates is help keeping the markets afloat today. The Dow is currently approaching another triple-digit gain and the S&P 500 Index (SPX) is up half a percent. With market winds at their back, 64 NYSE stocks have hit new highs today, along with 36 NASDAQ names. Just 28 stocks have hit new lows – 14 on the NYSE and 15 at the NASDAQ.

Notable Stocks at Annual Highs

  • AT&T Inc. (T - 34.32) has been on a ride today, rising to a new annual high of $34.74 out of the gate before dipping below breakeven in late-morning trading after Sprint (S - 2.73) announced plans to offer prepaid iPhones with cheaper data plans. T is still up almost 13.5% in 2012 and has outperformed the S&P 500 Index (SPX) by 18% in the past two months. Analysts are rather split on T, however, awarding 12 "buys," 16 "holds," and one rare "strong sell," and option players have shown signs of increasing bearishness. The buy-to-open put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is at 2.58 over the past 10 days, just shy of a new annual high.

  • Still entrenched in a long-term uptrend, Altria Group, Inc. (MO - 32.58) extended beyond its early May peak to notch a new high of $32.87 today. The shares have gained 10.5% this year and have benefited from nearly constant support at their 40-day and 80-day moving averages going back to the fall of 2011. The stock's Relative Strength Index (RSI) sits at 49, suggesting it is far from overbought territory, and analysts' 12-month price target of $32.82 may need adjustment in the near term, as the stock has already exceeded this mark.

  • The Walt Disney Company (DIS - 45.99) sold its remaining control of Asian ESPN STAR Sports to News Corp. (NWS - 19.73) and moved to a new annual high of $46.22 – all in all, not a bad day so far. DIS shares have gained 22.6% in 2012 even while short interest has been growing, up 22% in the last reporting period alone. Meanwhile, 10 of the 26 analysts following the stock have named it a "hold," leaving some potential room for upgrades, should DIS continue to explore new annual highs.

  • Online travel agent Expedia Inc (EXPE - 46.63) has rewarded shareholders with a year-to-date gain of almost 61%. The stock tagged a new annual high of $47.78 earlier today but is now dancing on either sides of the breakeven level. A series of upgrades and strong earnings allowed the stock to gap higher in late April, and the shares have yet to retrace any of these gains. What's more, the shares have now overtaken short-term resistance at the $45 level. Although EXPE has outperformed the SPX by 52% in the past three months, more than 22% of the security's float is sold short. These bears are beginning to push toward the exits, as EXPE short interest declined by almost 17% in the last two weeks. Continued short-covering activity could help lift the shares going forward.

  • The last name on today's new-high list is Skyworks Solutions Inc (SWKS – 27.89), which rallied to a new high of $29.09 right out of the gate but is now saddled with a loss of more than 1.5%. Year-to-date, however, the shares have appreciated nearly 72% and has been solid from a relative-strength perspective as well. It appears the options crowd may be betting against the semiconductor company, as the put/call volume ratio at the ISE, CBOE, and PHLX exchanges is perched near a new annual high, suggesting put options are being bought to open at an accelerated pace.

Notable Stock at Annual Lows

  • A negative earnings surprise took Comverse Technology, Inc. (CMVT - 5.71) to a new annual low of $5.40 today, adding to its year-to-date loss of almost 17%. CMVT has been in slow decline mode since late 2005, struggling beneath sporadic resistance from its 80-week moving average. Despite this long-term underperformance, five of eight covering analysts rate the stock a "buy" or better and the stock's RSI of 37 is not yet indicating an oversold condition.

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