Dow Jones Industrial Average Could Snap Volatile Streak

One Biotech's Killer August; Plus, 3 Stocks Ripe for a Short Squeeze

Aug 13, 2015 at 11:59 AM
facebook twitter linkedin


After 17 straight days of triple-digit trading ranges, the Dow Jones Industrial Average (DJIA) may be on the verge of snapping that streak. The blue-chip barometer has traded on both sides of breakeven -- but in a span of less than 90 points -- as traders weigh encouraging big-cap earnings and a global stock rally against tumbling crude and gold prices. In addition, Wall Street is digesting a bigger-than-expected uptick in weekly jobless claims, which is fueling more rate-hike-timing chatter.

 

Continue reading for more on today's market -- and don't miss:

 

150813MMC_stats

 

Among the stocks with notable option volume is China-based e-commerce concern Alibaba Group Holding Ltd (NYSE:BABA). After sinking to an all-time low of $71.03 on yesterday's earnings miss, oversold BABA is on the mend -- up 2.4% at $75.14, despite another round of negative analyst notes. BABA options are trading at 1.6 times the average intraday clip, with some traders seemingly buying to open weekly 8/14 75-strike calls. These contracts will move deeper into the money the higher the stock rebounds north of $75 through tomorrow's close, when the contracts expire.

 

One of the top gainers on the Nasdaq is biotech Ocular Therapeutix Inc (NASDAQ:OCUL). After exploring year-to-date lows yesterday, the security has surged 20.6% to trade at $21.71, after Morgan Stanley initiated coverage with an "overweight" rating and a $24 price target. The stock is now on pace to end atop its 10-day moving average for the first time since July 23.

 

150813MMC_OCUL

One of the top losers on the Big Board is restaurant chain Shake Shack Inc (NYSE:SHAK), which has surrendered 8.6% to sit at $59.19. The company priced a secondary offering at $60 per share -- south of yesterday's close at $64.79.

 

The CBOE Volatility Index (VIX) is down 0.3 point, or 1.8%, at 13.36.

 

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.42, with puts outpacing calls. At last check, the SPY was down 0.2 point, or 0.1%, at $208.76.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Best stocks for October and worst stocks for October
 


 


 
Special Offers from Schaeffer's Trading Partners