Published on Jul 1, 2020 at 2:39 PM
Updated on Jul 1, 2020 at 2:41 PM
  • Best and Worst Stocks
  • Quantitative Analysis

It's officially July, and things are only heating up as the uncertainty surrounding the market still weighs on investors' minds. There's a whole new slate of seasonality trends to keep an eye on, and Schaeffer's Senior Quantitative Analyst Rocky White has released the list of the best S&P 500 stocks to own in July over the past 10 years. One notable name on the list is VF Corp (NYSE:VFC), with the apparel concern boasting an intriguing technical setup as well.

More specifically, looking back over the last decade, VF stock boasts an average June return of 6.3%, with nine out of 10 returns positive. That's incredible for a stock that's just outside of the top 10, and the only personal goods name on the list.

Best of July

Digging deeper, VFC -- which at last check was trading flat at $60.82 -- is off 14% from its June 5, four-month high of $71.25. However, the stock has managed to tack on 25.1% in the past three months, and has found a solid level of support at its 70-day moving average, which captured a brief pullback just last week.

 

The options pits show that puts have been popular over the past 10 weeks. Specifically, VFC's 50-day put/call volume ratio of 1.63 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the 98th percentile of its annual range, suggesting a healthier-than-usual appetite for bearish bets of late. In simpler terms, if this bearish sentiment were to unwind, it could give VFC another boost up the charts.

The good news for options traders is that VFC's near-term options can be had for a bargain at the moment. The security's Schaeffer's Volatility Index (SVI) stands at 47%, ranking in the 29th percentile of its annual range. This indicates that now is an attractive time to jump aboard the VF stock with options.

Published on Jun 30, 2020 at 10:12 AM
Updated on Jun 30, 2020 at 11:25 AM
  • Best and Worst Stocks
  • Quantitative Analysis
  • Editor's Pick

July is right around the corner, and Schaeffer's Senior Quantitative Analyst Rocky White is back once again to outline the best and worst stocks to own for the new month. As gold prices continue to climb in the face of stark economic uncertainty, Newmont Corporation (NYSE:NEM) has tacked on 31.5% this quarter. However, as July heats up, the gold stock could be due to cool off. In fact, NEM shows up on a list of the 25 worst S&P 500 performers in July, looking back over the past 10 years.

More specifically, looking back over the last decade, Newmont stock suffered an average June loss of 2.4%, with only four out of the 10 returns positive. That's good for second-worst on the list, and the only mining name to be found among the lineup. At last check, NEM was trading at $59.02. What's more, the shares have encountered stiff resistance at their 40-day moving average in June, despite a 35.6% year-to-date gain. 

Worst of July

In the options pits, traders are focused on calls. Newmont stock's 10-day call/put volume ratio of 4.2 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 76% of readings in its annual range. In other words, long calls are being picked up at a much quicker-than-usual rate.

Echoing this, NEM's Schaeffer's put/call open interest ratio (SOIR) of 0.63 sits in the low 7th percentile of other readings from the 12 months. This suggests short-term option players have rarely been more call-biased.

Daily Stock Chart NEM

Published on Jun 29, 2020 at 3:50 PM
Updated on Jun 29, 2020 at 3:51 PM
  • Quantitative Analysis

The shares of ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) have been trading in a channel of higher highs lately, contained by the $45 and $50 levels during the past three months. The stock has made several attempts to topple this upper level, with its last attempt putting it at a record high of $53.75, before a swift pivot back down the charts. This most recent pullback, however, put the security face-to-face with a historically bullish trendline that, if past is precedent, could sent ACAD back in the direction of its record highs. 

Specifically, the biotech pulled back to its 80-day moving average after a length period north of the trendline. According to a study from Schaeffer's Senior Quantitative Analyst Rocky White, the security has come within one standard deviation of this trendline five other times in the past three years. ACAD was higher one month later after four of these signals, and averaged a one-month return of 3.4%. A similar move from its current perch of $48.32 would put the security right back below the $50 mark. 

Short interest is starting to unravel, down 0.2% in the last two reporting periods, though there's still plenty of room for a short squeeze to propel the stock higher. The 11.49 million shares sold short make up nearly 8% of ACAD's available float and would take almost two weeks to cover at the equity's average daily pace of trading. 

For those wanting to speculate on ACAD's next move, options look like a prudent play right now. ACADIA's Schaeffer's Volatility Index (SVI) of 64% stands higher than just 21% of readings from the past year. This means options players are pricing in relatively low volatility expectations at the moment.  

Published on Jun 29, 2020 at 2:27 PM
  • Quantitative Analysis



Published on Feb 2, 2017 at 11:50 AM
Updated on Jun 24, 2020 at 10:16 AM
  • Quantitative Analysis
  • Intraday Option Activity
Apple Inc. (NASDAQ:AAPL) stock jumped to an annual high of $130.49 yesterday on the heels of a blowout earnings report. The share price wasn't the only thing that popped, either -- so too did volume on AAPL call options. In fact, call volume surpassed one million contracts for the first time since early August.

Based on an analysis by Schaeffer's Quantitative Analyst Chris Prybal, similar signals have yielded bullish returns for the Dow stock, going back to 2000. The charts below break down the data in-depth:

aapl stock returns after unusual call volume feb 2

aapl stock anytime returns feb 2

As you can see, one week after AAPL call volume surpasses one million, the stock has been positive three-quarters of the time, with an average gain of 1%. This compares favorably to an anytime one-week advance of 0.6%, with 56% positive. The average return is even more impressive going out two weeks (3% vs. 1.2%), with almost 70% positive (vs. 57% anytime).

At last check, Apple stock was 0.1% lower at $128.65, even after a price-target hike to $142 from $114 at J.P. Morgan Securities. This isn't necessarily unexpected, though, considering yesterday's bull gap landed the shares in "overbought" territory by the close -- based on their 14-day Relative Strength Index (RSI) of 70.

From the looks of it, options traders are banking on even more gains for AAPL, based on its 20-day call/put volume ratio of 1.68 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Today, calls more than double puts, with what looks like buy-to-open activity at the weekly 3/3 129-strike call.

As alluded to, Apple Inc. (NASDAQ:AAPL) is more or less treading water at midday. On the other hand, shares of these two Apple suppliers have sunk on downbeat guidance.

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Published on Feb 3, 2017 at 11:06 AM
Updated on Jun 24, 2020 at 10:16 AM
  • Quantitative Analysis

The highlight of this weekend for many Americans is Super Bowl LI, where the New England Patriots will face off against the Atlanta Falcons on Sunday evening. For the Patriots, this will mark their ninth trip to the NFL's championship game; for the Falcons, this will be the second Super Bowl appearance ever. So while the broader market is enjoying a rally this morning, we're looking ahead at shares that could rally or sell off following a Tom Brady win. The tables below show the 10 best and 10 worst stocks, historically, after a Patriots Super Bowl victory, based on rest-of-year returns. The data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, and two particular names of interest are Dow components UnitedHealth Group Inc (NYSE:UNH) and Wal-Mart Stores Inc (NYSE:WMT).

Best Stocks Patriots Win Super Bowl February 3

Healthcare concern UNH has been enjoying a long-term climb up the charts, adding 41% year-over-year at $161.39. The stock's 50-day moving average has been limiting pullbacks lately, following a record high of $164 in mid-December. Perhaps a Patriots victory could put the wind back in UNH's sails. After all, the stock has seen positive returns through year's end after every previous New England Super Bowl win, averaging a gain of 26%.

Analysts appear confident in UNH, with 18 of 19 giving the shares a "buy" or better recommendation. But options traders don't appear convinced. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), UnitedHealth Group Inc's (NYSE:UNH) 10-day put/call volume ratio of 1.80 ranks in the top quartile of all readings from the past 12 months. (Though, some put buyers may be shareholders protecting paper profits.)

Meanwhile, WMT could be in trouble, should the Patriots take home the Vince Lombardi Trophy. Following New England's four previous wins, the retail giant has never managed a positive rest-of-year return, and has averaged a 14% loss. Notably, WMT has historically been the top performer after the Patriots lost -- but more on that later today.

WMT shares have been slumping since August, and are down 3.5% so far in 2017, at $66.68. And it looks like traders and analysts are already bracing for further losses. For starters, two-thirds of tracking brokerage firms recommend holding or selling the stock. Plus, WMT's 10-day put/call volume ratio of 3.08 at the ISE, CBOE, and PHLX -- showing three Wal-Mart Stores Inc (NYSE:WMT) puts purchased for each call over the last two weeks -- ranks just 1 percentage point shy of an annual peak.

For traders taking a broader approach through the end of the year, it may be helpful to know where the Dow could be headed as a whole. Well, the table below shows rest-of-year returns following each of the Patriots' prior Super Bowl appearances. A win for New England has resulted in an average loss of 2.9% -- due entirely to the 2002 sell-off. A loss, meanwhile, has seen three positive returns out of four, but with an average gain of 3.2%.

Dow After Patriots Super Bowl February 3

Historical returns following wins by either an American Football Conference (AFC) or National Football Conference (NFC) team seem to concur that a Patriots loss would be better for the stock market, with NFC victories historically yielding a roughly 11% gain for the Dow through the rest of the year, and positive 88% of the time. This clearly outdoes the 3.8% average gain following an AFC triumph, with 67% positive. But as we explored a couple of years ago, there are many stock theories related to Super Bowl outcomes, and randomness ought not be discounted.

Dow After Super Bowl February 3

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Published on Feb 3, 2017 at 11:25 AM
Updated on Jun 24, 2020 at 10:16 AM
  • Stocks On the Move
  • Technical Analysis
  • Quantitative Analysis
Last week, we highlighted ONEOK, Inc. (NYSE:OKE) as an energy stock that could surprise Wall Street. Since then, the shares have grinded higher, adding 2.3%. This time around, we're looking at online real estate marketplace Zillow Group, Inc. (NASDAQ:ZG). While ZG does not typically see much options trading, history suggests the shares could rise in the coming days, especially with earnings just around the corner. 

First of all, ZG has been climbing the charts since last February, notching a series of higher lows in the process -- and sporting a year-over-year gain of 82% to trade at $36.24. The stock recently pulled back its rising 160-day moving average, a trendline that's provided strong support in recent months. In fact, data from Schaeffer's Senior Quantitative Analyst Rocky White shows that Zillow stock has gained on a 21-day time frame following three of the past four times it's neared this moving average in the last three years, averaging an 11.1% return.  

Zillow stock chart

As mentioned, Zillow earnings are due out after the close next Tuesday, Feb. 7, which may be a good sign for bullish traders. For instance, the equity has moved higher in the session subsequent to the company reporting in two of the past three quarters, including a 5.6% jump after the last release in early November. But options traders have paid little to no attention to ZG. Total options open interest resides in just the 3rd annual percentile, with 16,341 contracts outstanding, and just 14 calls bought to open during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- compared to zero puts. 

One group that has targeted the security is short sellers, who control a whopping three weeks' worth of buying power, going by average daily volumes. And this is despite the fact that short interest took a sharp drop in early December -- which happened to correspond with a sharp rise in the share price. Considering short sellers still control a notable portion of ZG shares, there's certainly potential for a continued short-covering scenario to lift the stock. 

Zillow short interest

Finally, it should also be noted that any upward move from Zillow Group, Inc. (NASDAQ:ZG) has the potential to draw bullish attention from the brokerage crowd -- especially since the shares have already put in an impressive performance over the past year. At the moment, nine of 15 analysts are sitting on the fence with a "hold" recommendation, and an earnings beat could persuade them to upgrade their ratings. 

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Published on Feb 3, 2017 at 11:54 AM
Updated on Jun 24, 2020 at 10:16 AM
  • Technical Analysis
  • Quantitative Analysis
  • Expectational Analysis
Financial stocks are in the crosshairs today, amid rumblings that President Donald Trump could roll back regulations within the industry -- including Dodd-Frank. Shares of Paypal Holdings Inc (NASDAQ:PYPL) and Navient Corp (NASDAQ:NAVI) are benefiting, too, both solidly higher at last check. Plus, based on a closer look at the stocks' respective charts, the duo could be on the verge of a near-term breakout.

Currently, PYPL is up 0.7% at $39.86. What's more, the financial shares are flirting with their 200-day moving average, which has served as a bullish signal in the past. In the last three years, the stock has touched this trendline four times, and gained ground in the ensuing month 100% of the time. On average, PYPL's post-signal 21-day return is a gaudy 4.8%.

paypal stock chart with 200 day moving average

It's a similar story for NAVI. The shares recently touched their 160-day moving average, and following the two prior occurrences, they soared an average of almost 21% in the ensuing 21 sessions. It looks like the bounce is already beginning, as the stock is currently up 1.9% at $15.39.

Two other factors could bolster both PYPL and NAVI shares. For one, each stock's 14-day Relative Strength Index (RSI) settled at 34 last night -- just a chip-shot from "oversold" territory, suggesting today's gains may have been in the cards. For another, PYPL and NAVI have elevated short-interest ratios (SIR) of 6.20 and 6.60, respectively. In other words, there's plenty of pent-up buying power on the financial stocks, which could lead to a powerful short-squeeze rally.

Technically speaking, Paypal Holdings Inc (NASDAQ:PYPL) and Navient Corp (NASDAQ:NAVI) have cooled off lately, as evidenced by their low RSI readings and trendline pullbacks. Longer term, NAVI has been the stronger of the two, soaring 61.3% year-over-year, while PYPL has tacked on a more modest 7.2%.

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Published on Feb 3, 2017 at 12:40 PM
Updated on Jun 24, 2020 at 10:16 AM
  • Technical Analysis
  • Quantitative Analysis
  • Indexes and ETFs
  • By the Numbers

Since the U.S. election, and amid escalating political tensions between the U.S. and Mexico, investors have been keeping an eye on iShares MSCI Mexico Capped ETF (EWW) shares. Despite recent reports that President Donald Trump told Mexican President Enrique Pena Nieto he would consider sending U.S. troops to Mexico to stop "bad hombres" -- with Mexican officials denying a threatening tone to the comments -- EWW is in positive territory for the day, and is continuing to recover from its seven-year low of $41.23, touched just last month. Meanwhile, it looks like options traders may be changing their tune on the shares of the Mexican ETF, which typically averages a gain in the month of February.

EWW On the Charts

EWW is up 0.8% at $45.89 so far today. The shares have been making a series of lower highs and lows since 2014, with several rebound attempts stopped by their 80-week moving average. According to Schaeffer's Quantitative Analyst Chris Prybal, EWW has averaged a gain of 0.9% in February, since inception, with March historically being the ETF's top-performing month, averaging a gain of 4.8%. Currently, the shares are up 2.7% month-to-date.

EWW Mexico ETF chart

Options Traders Buy EWW Calls

In the option pits, put volume hit an annual high the day after the U.S. election, on Nov. 9. However, long calls have been gaining popularity in the past two weeks, with EWW's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 3.31 sitting just 3 percentage points from an annual peak. Near-term traders are now more call-skewed than usual, with iShares MSCI Mexico Capped ETF's (EWW) Schaeffer's put/call open interest ratio (SOIR) of 0.73 in just the 6th percentile of its annual range.

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Published on Feb 3, 2017 at 2:37 PM
Updated on Jun 24, 2020 at 10:16 AM
  • Quantitative Analysis
  • Expectational Analysis
If you're like most football fans outside of New England, you're rooting for a Patriots loss this Sunday. But one thing to keep in mind as you root against Tom Brady and Co. is what a Super Bowl loss could do to your stock portfolio. Below are two lists with the best and worst stocks to own following a Patriots Super Bowl loss, based on rest-of-year returns. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Based on the charts, you'd want to own Kroger Co (NYSE:KR) shares, and avoid Nike Inc (NYSE:NKE) shares.

best and worst stocks after patriots lose super bowls

New England has lost four Super Bowls over the last 50 years. Wal-Mart Stores, Inc. (NYSE:WMT) has done the best in the aftermath of those instances, but KR isn't far behind. The grocery stock has averaged a rest-of-year return of 24%, with all four occurrences leading to a positive performance.

KR shares have been rising since bottoming at $28.71 in late October, last seen trading at $34.13. Options traders have remained bearish, though, perhaps swayed by the stock's deep year-over-year deficit of 12.4%. The equity's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is a top-heavy 2.49. This ratio ranks in the pessimistically skewed 97th annual percentile.

Not to mention, Kroger Co's Schaeffer's put/call open interest ratio (SOIR) of 1.50 registers only 11 percentage points from a 52-week peak. Of course, it's possible some put purchases came at the hands of shareholders seeking a downside hedge. Nonetheless, KR shareholders should root for the Atlanta Falcons.

Conversely, NKE shareholders should hope the Pats can avoid a loss. After New England's last four Super Bowl failures, the Dow stock has had negative year-to-date returns 100% of the time, with an average loss of 22%. This would continue the shares' bearish long-term trend, as NKE has surrendered 12.6% year-over-year to hover at $52.60.

Understandably, sentiment has piled up on the negative side of the aisle. For one, Nike Inc's SOIR of 1.18 checks in above nine-tenths of all readings recorded in the past 12 months. For another, a majority of covering analysts consider the stock a "hold" or worse -- though 14 "strong sell" endorsements remain, suggesting there's room for downgrades, in the event of post-Super Bowl downside.

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Published on Feb 6, 2017 at 10:31 AM
Updated on Jun 24, 2020 at 10:16 AM
  • Quantitative Analysis
  • Earnings Preview

After tomorrow's close, tech firm Twilio Inc (NYSE:TWLO) will report quarterly earnings for the third time since the stock began trading publicly. While the previous two reports give little indication of where the shares could be headed next, TWLO stock is up 0.8% at $31.63 today, and both call and put options are trading at an accelerated pace. While call buyers have had the upper hand lately, that doesn't necessarily mean everyone's bullish.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TWLO has seen 7.47 calls purchased for each put over the past 10 days -- the highest ratio on record for the stock. However, it's possible some recent call buyers are actually short sellers looking to hedge their positions ahead of earnings. After all, nearly 30% of TWLO's total float remains dedicated to short interest.

The brokerage bunch seems optimistic, anyway. Out of 10 analysts tracking TWLO, seven rate the shares a "strong buy," and not one gives the stock a "sell" rating. Plus, the average 12-month price target of $38.10 sits at a healthy premium over current levels.

A look at TWLO's short earnings history reveals mixed results in the session subsequent to reporting. So far, the stock has moved in either direction one time, averaging a 2.2% single-day swing. Options traders seem to be eyeing some dramatic price action for Wednesday, however, currently pricing in a one-day move of 15.8%.

Since it began trading publicly last June, TWLO has been quite a roller coaster on the charts, soaring through late September before quickly shedding nearly all of its gains. In recent months, however, the shares have stabilized, and are now up 9.6% in 2017. Plus, Twilio Inc (NYSE:TWLO) stock finished Friday above the 50-day moving average for the first time in nearly four months.

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Published on Feb 9, 2017 at 3:04 PM
Updated on Jun 24, 2020 at 10:16 AM
  • Expectational Analysis
  • Quantitative Analysis

Freeport-McMoRan Inc (NYSE:FCX) is down 0.6% at $15.43 today, following a downgrade to "neutral" from "overweight" at J.P. Morgan Securities, as well as news U.K.-based miner Rio Tinto plc (ADR) (NYSE:RIO) may be planning to abandon its interest in FCX's Grasberg copper mine in Indonesia. Longer-term, however, the stock has been a monster on the charts, adding an impressive 210% year-over-year, including a 17% climb already in 2017. Since tapping an annual high late last month, the shares have pulled back, but that's not necessarily a bad sign. Plus, now may be a prime time to pick up FCX options.

FCX's recent dip has put it just above the 40-day moving average -- a trendline that has been lending support for more than a month. This represents the stock's sixth pullback to the moving average over the past three years. And it's typically been a bullish signal for FCX, with the shares seeing an average 21-day return of 7.7%, and positive 60% of the time.

FCX Daily Chart February 9

It appears traders may already be anticipating future gains for FCX, too. For instance, short interest on the stock has dropped by roughly 46% over the last three months. The 65 million shares still sold short represent the lowest level in well over a year, and would take only two sessions to cover, at FCX's average daily volume.

Options traders have been placing upbeat bets, as well. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have purchased FCX calls at more than twice the rate of puts over the last 10 weeks. Moreover, the resulting call/put volume ratio of 2.49 ranks just 2 percentage points from an annual high. Likewise, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.60 is lower than 96% of the past year's readings, indicating near-term options traders have rarely been more call-heavy toward FCX.

Notably, the mining stock continues to present an attractive opportunity for options buyers. FCX sports a Schaeffer's Volatility Index (SVI) or 44% -- in the low 2nd percentile of its 52-week range -- as well as a 30-day at-the-money implied volatility of 44.5%, below 99% of all comparable readings from the past year. Put simply, near-term FCX options are pricing in historically low volatility expectations right now. Plus, the equity's Schaeffer's Volatility Scorecard (SVS) of 91 indicates the options market has underpriced FCX's ability to make big moves over the last 12 months.

Of course, not everyone is an optimist when it comes to Freeport-McMoRan Inc (NYSE:FCX). Among the 15 brokerage firms tracking the stock, 11 rate it a "hold" or worse. What's more, the average 12-month price target of $14.72 sits at a discount to current trading levels. Should FCX keep its long-term rally alive, a round of analyst upgrades and/or price-target hikes could add fuel to its fire.

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