Wednesday's Best and Worst Stocks: EA, FB, CHK, and DD

Electronic Arts Inc. (NASDAQ:EA) and Facebook Inc (NASDAQ:FB) have turned in solid Wednesday performances this year, while Chesapeake Energy Corporation (NYSE:CHK) and E I Du Pont De Nemours And Co (NYSE:DD) have not

by Karee Venema

Published on Sep 22, 2015 at 12:15 PM
Updated on Jun 24, 2020 at 10:16 AM

Yesterday, Schaeffer's contributor Adam Warner took a closer look at individual days of the week to see if any had a particularly bullish or bearish bias (buyers, beware of Friday!). Our Senior Quantitative Analyst Rocky White took this one step further, and ran the numbers to see which stocks have performed well -- or not-so-well -- throughout the week. Tomorrow, bulls may want to keep an eye on video game guru Electronic Arts Inc. (NASDAQ:EA) and social network giant Facebook Inc (NASDAQ:FB), while bears may want to take note of oil-and-gas issue Chesapeake Energy Corporation (NYSE:CHK) and blue chip E I Du Pont De Nemours And Co (NYSE:DD).

EA has been a long-term technical standout, rallying 46% year-to-date, and tagging a record high of $75.76 in early August. While the shares are succumbing to broad-market headwinds today -- last seen down 2.6% at $68.73 -- tomorrow could be a completely different story. In fact, throughout 2015, EA has averaged a Wednesday gain of 0.9%, and has been positive almost 68% of the time.

Additionally, the stock could get a boost, should skeptics capitulate to its upward momentum. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Electronic Arts Inc.'s 10-day put/call volume ratio of 0.84 ranks in the 67th annual percentile. Plus, it would take nearly a week to cover all of EA's shorted shares, at average daily trading volumes.

FB, meanwhile, has been positive nearly three-quarters of every Wednesday during 2015, averaging a gain of 0.8%. More recently, though, the shares have stalled out in the $95-to-$96 region. Today, the stock is down 3.2% at $92.51, and on pace to close south of its 10-day moving average for just the second time this month.

There's plenty of optimism levied toward Facebook Inc, though. In fact, all but two of the 29 analysts covering the shares maintain a "buy" or better rating, with not a single "sell" to be found. Should the shares continue their recent churn, a round of downgrades could exacerbate FB's struggles.

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On the flip side, CHK has averaged a Wednesday loss of 0.9%, and has been positive less than one-third of the time. This only echoes the equity's withstanding trajectory, with shares of CHK down about 58% year-to-date, and fresh off an Aug. 25 12-year low of $6.01. Today, the security is following in the bearish footsteps of crude oil, off 4.1% at $8.23.

Against this backdrop, put players have been busy. For starters, the equity's 50-day ISE/CBOE/PHLX put/call volume ratio of 1.83 ranks in the 97th percentile of its annual range. Plus, Chesapeake Energy Corporation's Schaeffer's put/call open interest ratio (SOIR) of 3.39 sits just 3 percentage points from a 52-week peak, meaning short-term traders have rarely been as put-heavy as they are now.

Finally, DD has lost roughly one-third of its value this year, and was last seen 0.5% lower at $47.99 -- despite an upgrade to "buy" from "neutral" and price-target hike to $63 at Citigroup. If history is any guide, the shares could be poised to extend this downtrend tomorrow, considering DD has averaged a Wednesday loss of 0.5% throughout 2015, and has been positive just 35.1% of the time.

Option traders have kept the faith, though, and at the ISE, CBOE, and PHLX, DD's 50-day call/put volume ratio of 4.25 rests above all comparable readings taken throughout the year. Simply stated, calls have been bought to open over puts at an annual-high clip in recent months. Should E I Du Pont De Nemours And Co widen its year-to-date deficit, an unwinding of these bullish bets could translate into headwinds for the shares.

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