Can Option Traders Help These 3 Stocks Move Higher?

Put buyers have set their sights on outperforming Under Armour Inc (NYSE:UA), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), and Amicus Therapeutics, Inc. (NASDAQ:FOLD)

Sep 17, 2015 at 1:22 PM
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Put players have been active on athletic apparel concern Under Armour Inc (NYSE:UA), online travel concern Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), and biopharmaceutical firm Amicus Therapeutics, Inc. (NASDAQ:FOLD). What's surprising, though, is that each of these equities is boasting a strong year-to-date advance. Based on our Expectational Analysis® methodology, this skeptical sentiment set-up could have bullish implications down the road, should bearish bettors begin to capitulate to each stock's upward momentum.

In UA's options pits, for example, the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.92 ranks in the 96th annual percentile. Simply stated, puts have been bought to open over calls with more rapidity just 4% of the time within the past year.

Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 1.36, which sits higher than 94% of all similar readings taken in the last 12 months. In other words, short-term speculators have rarely been as put-heavy toward UA as they are now.

On the charts, though, the stock has been a powerhouse -- rallying almost 55% year-to-date. What's more, the shares hit a record high of $105.76 earlier, after yesterday's upbeat forecast was met with a round of bullish brokerage notes today. D.A. Davidson offered up the most optimistic forecast, raising its price target by $16 to $131, and, at last check, Under Armour Inc was lingering near $104.57.

CTRP, meanwhile, has surged a brow-raising 58% in 2015. What's more, although broad-market headwinds had the security pulling back in August, it found a foothold -- and took a subsequent bounce -- off its 200- and 320-day moving averages. Today, the China-based name is feeling the heat from overseas, down 1.1% at $71.53, but remains comfortably above its 120-day moving average.

Put buyers, however, have been flooding the equity's options pits. At the ISE, CBOE, and PHLX, CTRP's 10-day put/call volume ratio of 3.95 rests above all other comparable readings taken in the past year.

Traders have specifically been targeting the equity's October 60 put over the past two weeks, and it appears the majority of the action has been of the buy-to-open kind. In other words, these speculators expect Ctrip.com International, Ltd. to be sitting south of the round-number $60 mark at the close on Friday, Oct. 16 -- when the soon-to-be front-month options expire.

Finally, FOLD's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.64 ranks in the 84th percentile of its annual range, meaning speculators have been quick to initiate long puts relative to calls in recent months. In the front-month series, specifically, the September 17 strike has been in heavy rotation during the last 10 sessions. Those buying to open the options expect the security to retreat below $17 by week's end, when the series expires.

However, this skepticism isn't confined to the options pits. Short interest on FOLD jumped 20.3% in last two reporting periods, and now accounts for 14.6% of the equity's available float. In fact, it would take more than eight sessions to cover these shorted shares, at average daily trading volumes.

On the charts, though, Amicus Therapeutics, Inc. has more than doubled in value year-to-date -- and recently surged on well-received M&A news -- and hit an all-time peak of $18.83 on Aug. 5. This afternoon, the shares have added 0.6% to trade at $17.26.

 

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