The shares of Ciena Group (NYSE:CIEN) are up 1.7% at $54.79 at last check, following a fresh round of bull notes one day after the company's second-quarter earnings. The communications and networking name has seen no fewer than three price-target hikes this morning, the highest coming from Cowen to $73 from $69. 

Soaring on the charts as of late, CIEN is fresh off its June 3, post-earnings 18-year high of $57.19. Though staring down at a 0.9% drop for the week following yesterday's pullback, the stock is now contending with its ascending 10-day moving average and has surged 56.9% in the last six months. 

Lastly, when weighing in on CIEN, options looks like an attractive way to go.  The stock's Schaeffer's Volatility Index (SVI) of 37% is higher than just 13% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

 

Over the past two weeks, we've been exploring some of the best S&P 500 stocks to own in June, historically. Now, with help from Schaeffer's Senior Quantitative Analyst Rocky White, we'll shift gears and focus on 25 of the worst performers this month, looking back over the past 10 years. One notable name on the list is Regeneron Pharmaceuticals Inc (NASDAQ:REGN).

Though the biotech has been charging up the charts lately, hitting a record high of $618.71 on June 2, history shows that it might be time for REGN to take a breather. In the last decade, Regeneron Pharmaceuticals has only seen three positive one-month returns in June, averaging a loss of 4.6%. This is good for worst on the list and makes REGN the only biotechnology stock present. 

Digging deeper on the charts, REGN is up an impressive 106.5% in the past nine months, recently pushing past the $600 region for the first time in over four years. However, the stock seems to have lost steam just below its aforementioned all-time high and is down 1.8% so far in June after four straight months of gains. 

Analysts are split on Regeneron stock, with 11 sporting a "strong buy," compared to 10 at a tepid "hold." Meanwhile, the 12-month consensus price target of $604.88 is just a chip-shot away from current levels, which could lead to price target cuts, should REGN continue its sideways trajectory. 

Though calls are still outweighing puts overall, there has been an unusually heavy appetite for these bearish bets of late. This is per REGN's 50-day put/call ratio of 0.60 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) which stands higher than 78% of all other readings from the past year.  

Shipping giant FedEx Corporation (NYSE:FDX) is in the news today, after announcing it was tacking on delivery fees to U.S. shipments. The move represents an effort to combat lagging business amid the coronavirus pandemic and subsequent shutdown of the economy. At last check, FDX is down 1% to trade at $136.61, but the trouble could just be getting started, with the stock brushing up to a historically bearish trendline.

Specifically, FDX is running into its 160-day moving average, which has acted as resistance over the past three years, according to Schaeffer's Senior Quantitative Analyst Rocky White. In the seven prior times this signal has sounded, FDX was down 10.3%, on average, one month out, with only one of the returns positive. 

What's more, FedEx's Schaeffer's Volatility Index (SVI) is currently perched near its two-year average of 34.7%, last seen at 44%. Not only does the current ratio rank in the 21st annual percentile, suggesting short-term options premiums are relatively cheap at the moment, but White's modeling shows that an at-the-money FDX put option could potentially return 164% on another expected retreat from resistance at the 160-day trendline. In other words, prospective put buyers could more than double their money on a 10.3% drop in the shares, a month out.

FDX's 12.6% quarterly rally also seems to have stalled out at its -10% year-to-date breakeven level, which sits just below the aforementioned 160-day trendline. And further, the security's 14-Day Relative Strength Index (RSI) closed yesterday at 67 -- on the cusp of overbought territory -- indicating a short-term breather could be on its way.

There could also be optimism unwound in the options pits. FedEx's Schaeffer's put/call open interest ratio (SOIR) of 0.76 sits in the low 7th percentile of other readings from the past year. This suggests short-term option players have rarely been more call-biased in the past 12 months.

Although it may not be as conspicuous on Wall Street, Main Street has been gripped by the protests and civil unrest over the death of George Floyd. All 50 states have engaged in protests against police brutality and systemic racism since late May, and the tensions have been exacerbated by U.S. President Donald Trump's threats to deploy military to contain the rallies. It’s far from appalling to claim that large news stories can act as a major influence to investor sentiment, so what could this level of unrest mean for the stock market moving forward?

To help identify a correlation between stock market performance and protests, we needed first to define what has encompassed a protest in the past. Not including the current U.S. upheaval, we identified 12 protests since the 1992 Rodney King riots that we considered "notable." Then, using data compiled by Schaeffer's Senior Quantitative Analyst Rocky White, we looked at the S&P 500 Index (SPX) returns within four time frames after the protests died down.

As you can see from the table above, there is a slight underperformance after a majority of these protests, but nothing eye-opening. But what is interesting is the short-term standard deviations. The one- and three-month standard deviations following major protests sit at 2.8% and 4.9%, respectively, much slimmer than the anytime one- and three-month anytime standard deviations of 4.5% and 7.3%. What this means is that the market has been less volatile than normal following these protests in the short-term or immediate aftermath, despite the six-month return showing standard deviation hurtling past the anytime returns.

It's looking like a relatively quiet week, as far as earnings and economic data go. With earnings season in the rear-view, a few names are still trickling down with quarterly reports, including Stitch Fix (SFIX) and Lululemon Athletica (LULU), as well as jewelry staples Signet Jewelers (SIG) and Tiffany & Co (TIF). Investors will sift through data on job openings, as well as the core consumer price index (CPI), and the producer price index (PPI). Wednesday's Federal Open Market Committee's (FOMC) economic projections and latest interest rate decision will be the thing to watch in the coming week, with a press conference from Fed Chair Jerome Powell to follow. 

Below is a brief list of some key market events and a few high-profile earnings releases scheduled for the upcoming week. All earnings and economic dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

It will be a quiet start to the week on Monday, June 8, with Stitch Fix set to report earnings. 

Things will start to pick up on Tuesday, June 9 with Chewy (CHWY) and Signet Jewelers posting quarterly reports. Investors will keep a close eye on the Job Openings and Labor Turnover Survey (JOLTS), as well as wholesale inventories data and the NFIB small business optimism index. 

Wednesday, June 10 will bring out earnings reports from Guess? (GES), Red Robin Gourmet (RRGB), and Tiffany & Co. The Fed's latest interest rate decision is due out, and a press conference with Fed Chair Jerome Powell will follow. The core consumer price index, and the Federal budget balance for May are also slated for release. 

Earnings reports from Adobe (ADBE) and Lululemon Athletica are on tap for Thursday, June 11. Wall Street will also be on the lookout for initial jobless claims, and the producer price index. 

The economic calendar on Friday, June 12 will feature import and export price data and the University of Michigan's consumer sentiment index. 

The shares of Simon Property Group Inc. (NYSE: SPG) are up 2.4% at $74.57 this morning, after the biggest mall owner in the country sued apparel retailer Gap (GPS) for more than $65.9 million in missed rent payments and overdue charges, according to a lawsuit filed Tuesday in Delaware state court. Gap is not the only major retailer skipping rent -- many others have stopped making payments after the coronavirus pandemic forced them to shut down stores, sparking tension with landlords.

On the charts, SPG has been struggling to recover from the steep selloff it suffered to the $42 level in mid-March, when most states implemented stay-at-home orders and closed nonessential businesses. Earlier in January, before the pandemic hit the U.S., that shares were pushing against the $150 level. And although SPG was able to find support at the round $50 level in early April, the equity remains down over 50% year-to-date.

Ahead of the lawsuit, analysts were hesitant toward SPG. Coming into today, 10 of the 13 in coverage sport a lukewarm "hold" recommendation, while the remaining three carry a "buy" or better. However, the stock's 12-month consensus price target of $78.21 is a healthy 5% premium to current levels.

In the option pits, the appetite for calls is unusually high as of late. In the last 10 days, 4.61 calls were bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all readings from the past year, meaning calls are being picked up at a faster-than-usual clip. 

 

The shares of Nio Inc (NYSE:NIO) are up 5.2% at $5.89 at last check, following a report on May deliveries and an announcement by chief financial officer Steven Feng that the company expects to achieve its second-quarter delivery goal. The China-based electric vehicle manufacturer delivered 3,436 vehicles in May, a record high, which led to a hefty 215.5% delivery growth in the past year. From a technical standpoint, NIO has been soaring on the charts, up 39% in 2020, with today's surge sending the stock to a fresh annual high of $6.20. 

Analysts are hesitant on NIO heading into today, with five out of six in coverage sporting a tepid "hold" recommendation. Meanwhile, the stock's 12-month consensus price target of $4.75 is a 22.8% discount to current levels, meaning a round of upgrades and/or price-target hikes may be in Nio stock's future. 

The options pits, however, are looking far more optimistic. In the past 10 days, 6.65 calls have been bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits 79% higher than all other readings from the past year, meaning traders are especially call-heavy as of late. 

 

 

Last week, at Schaeffer’s we dove into how the S&P 500 Index (SPX) is behaving during the current market turmoil, specifically exploring what, if anything, we could expect going forward. The analysis used an oscillator index called the Choppiness Index, and showed how the S&P 500 has performed based on specific key levels, including various spikes and brackets. Below, I will explore a similar sentiment, but hone in on a specific stock, as well as its bearish indicators that could be signaling traders to use a mode of caution in the coming weeks/months.

Specifically, our bearish filter finds stocks that are running into a notable moving average that has acted as proven resistance over the past three years. Using the average Schaeffer’s Volatility Index (SVI) rating over the past few years and the average return after running into said moving average, our Senior Quantitative Analyst Rocky White, found the expected put option return over the coming 10 and 21 days.

Zeroing in on agriculture ingredient processing name Archer Daniels Midland Co (NYSE:ADM), the equity has come within one standard deviation of its 120-day moving average, signaling runups to this particular trendline four times in the past three years. Ten days after each of these run-ins, the stock averaged a drop of 4.6%, with no returns positive, and the same is echoed for ADM’s 21-day return. A drop of this magnitude from the security’s Thursday close of $39.00 would put Archer Daniels Midland stock at $37.21, nearly spot-on its 80-day moving average.

As mentioned above, ADM’s SVI is running low, its ranking of 29% sitting in the 11th percentile of its annual range. This suggests that near-term options traders are pricing in relatively low volatility expectations -- a boon for bears looking to make a move on the equity.

Meanwhile, analyst attention is leaning bullish, signaling the stock is well overdue for a fresh round of downgrades and/or price-target cuts. Heading into Friday’s trading, four of the seven covering firms sport a “strong buy” recommendation and the stock’s average 12-month price target of $46.00 comes in nearly 20% above current trading levels.

Subscribers to Bernie Schaeffer's Chart of the Week received this commentary on Sunday, May 31.