Callaway Golf Co (NYSE:ELY) is trading 3.6% higher this morning after a bullish analyst note. Specifically, Raymond James pointed out that ELY's stake in TopGolf was worth around $290 million in 2017, a value not reflected in the current stock price. The analyst note suggests Callaway could look to cash out of this investment to fund future business efforts, especially since more than 9% of the float is controlled by activist Jana Partners. The security's rating was raised to "outperform" from "market perform," and Raymond James set a price target of $21.

ELY stock was last seen at $18.94, set up for its best finish since November. The shares are up 23.6% in 2019, and most analysts have been rightly bullish. Of the 12 brokerages in coverage, nine consider the equity a "strong buy."

Near-term options traders were well-positioned for a move higher it would seem. This is according to the Schaeffer's put/call open interest (SOIR) of 0.15, coming in at the lowest annual percentile. Said simply, traders targeting options that expire within three months are unusually call-heavy right now. Peak open interest resides at the October 19 call, and the September 17 call is right on its tail, with the strikes home to 3,394 and 3,356 contracts, respectively.

Not everyone is sold on ELY shares, though. Short interest accounts for almost 14% of the float, and it would take bears nearly nine sessions to cover, based on average daily trading volumes. Considering this alone, traders should pay attention to a potential short squeeze on Callaway Golf.

Stocks are making modest gains after Apple's (AAPL) product unveiling earlier today helped boost the tech sector. Three stocks making big moves today are retailer Francesca's Holdings Corp (NASDAQ:FRAN), drugmaker Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX), and bean bag specialist Lovesac Co (NASDAQ:LOVE). Below, we'll take a look at what's driving the shares of FRAN, LXRX, and LOVE. 

FRAN Hits Nine-Month High as Earnings Rally Rolls On

Women's clothing retailer Francesca's Holdings just hit a nine-month high of $14.88, extending Tuesday's gains after an upbeat second-quarter earnings report. Specifically, the firm posted a stronger-than-forecast adjusted profit and a slimmer decline in comparable-store sales. After more than doubling in value yesterday to close at $10.40 per share -- its biggest one-day percentage gain on record -- FRAN stock is up another 38.9% today at $14.44, pacing for its fifth straight daily win.

The stock is now trading back atop its 200-day moving average for the first time since September 2018, but it's still way below its year-ago pre-bear gap close atop the $70 region. Since that pre-earnings close of just over a year ago, FRAN stock has dropped nearly 80% -- and with a short interest ratio of just 2.5 days to cover, the post-earnings rally could soon taper off. 

$260 Million Settlement Boosts LXRX Stock

The shares of biotech name Lexicon Pharmaceuticals are up 30% at $2.22 after settling with Sanofi SA over the diabetes treatment Zynquista, with Lexicon gaining worldwide rights to the drug and a $260 million payout from Sanofi for terminating the pair's partnership. LXRX stock hit a seven-week high of $2.71 earlier, and is now testing its footing atop its 40-day moving average -- a trendline it hasn't even touched since its late-July bear gap. 

The typically quiet LXRX options pits are seeing a flurry of bullish activity as a result. So far, 4,137 calls have crossed the tape, which is 22 times the intraday average and roughly eight times the number of puts exchanged. The September 2 call is the most popular, where some speculators appear to be opening new positions. 

Revenue Beat Boosts LOVE Stock 

Lovesac stock is 13.2% higher at $20.84 at midday, after reporting an adjusted second-quarter loss of 31 cents, and $48.15 million in revenue, both of which beat analysts' estimates. The firm attributed these results to its reduced dependence on China, saying it hopes to pull all production from the country by the end of next year.

Now, LOVE is testing resistance at its 50-day moving average -- a trendline the stock hasn't closed above since suffering a massive bear gap after its last earnings report in June. The resulting sell-off sent the equity to an all-time low of $15.07 last week, and despite its recent bounce off this bottom, LOVE is still down roughly 9% year-to-date.

Analysts are surprisingly bullish on LOVE, considering its negative price action, with all five calling it a "strong buy." What's more, the consensus 12-month price target of $40.67 is approximately double current levels, and represents an area Lovesac hasn't touched since mid-May. 

Computer technology name Oracle Corporation (NYSE:ORCL) is down 3.3% to trade at $54.42, the stock reeling on the back of the company's lower-than-expected fiscal second-quarter forecast, and news that one of the company's two CEOs, Mark Hurd, will be taking unplanned medical leave. Oracle also shared a fiscal first-quarter revenue miss, but said it still plans to buy back $15 million in stock.

The slew of news has already triggered several mixed analyst reactions. RBC cut its price target to $57 from $59, while BMO Securities hiked its own to $60 from $59. Coming into today analysts are extremely bearish, with 17 of 21 firms sporting a "hold" or worse recommendation. Meanwhile, the stock's average 12-month price target of $56.47 comes in flat to current levels.

This bearish sentiment continues in the options pits, where Oracle stock sports a 10-day put/call volume ratio of 1.78 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the 94th percentile of its annual range, indicating puts have been purchased over calls at a faster-than-usual clip.

ORCL has performed well on the charts in 2019. While the stock remains well below its mid-July record peak, it marks a roughly 29% upside to its late-December lows. The 200-day moving average captured a brief pullback in early June and re-emerged as support just last month. Year-to-date, the shares are up around 21%.

One of the worst stocks on the New York Stock Exchange (NYSE) this morning is Aurora Cannabis Inc (NYSE:ACB), down 9.4% to trade at $5.88. The cannabis company's fiscal fourth-quarter revenue fell short of estimates due to lower-than-expected retail sales of recreational marijuana. Perhaps even more damaging, Aurora also pushed back its profitability timeline to fiscal 2020. 

This is pacing to be ACB's worst single-session drop since Jan. 17. Since breaking into double-digit territory in mid-March, Aurora Cannabis stock has since carved out a channel of lower highs, shedding roughly half its value by the end of August. And despite slight bounce this month, the rally has now been neatly contained by the shares' 50-day moving average. 

There's potential for downgrades to pressure the security lower, as most brokerage firms are positive on ACB. The stock boasts five "buy" or better ratings, compared to four "holds" and not a single "sell" rating. Plus, the consensus 12-month price target sits all the way up at $8.50, territory not traded at since late May.

Over in the options pits, calls were the options of choice in recent weeks. During the past 10 sessions, traders have bought to open 3.77 calls for every put on ACB, according to data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

However, short interest increased by 33.6% in the last two reporting periods and accounts for almost 12% of the equity's total available float. This means its possible some of this call buying could be shorts hedging against any potential upside.

The shares of Adverum Biotechnologies Inc (NASDAQ:ADVM) are taking a serious nosedive today, down 32.8% at $8.07, after data from an early stage trial of the company's wet age-related macular degeneration (wet AMD) gene therapy treatment, ADVM-022, were poorly received. As a result, ADVM is trading back near its mid-May levels, eyeing its biggest one-day percentage drop in over four years. 

Taking a look at the charts, ADVM spent the better half of the year rallying toward a three-year high of $16.38, hit in mid-July. The stock has cooled since then, but managed to bounce off its 100-day moving average earlier this month. The equity has fallen well below this trendline today, though, and is roughly 50% off this two-year peak.

Analysts have been cautious on the stock, with only two calling it a "strong buy," compared to the four who say it's a "hold." Plus, the 12-month consensus price target of $9.75 is at a discount to last night's close. 

Short sellers have been piling on the drugmaker, too. In the last reporting period, short interest rose 24.7%. Now, the 9.31 million shares sold short represent 21.5% of the stock's available float. Plus, it would take 8.5 days to buy back all these bearish bets, at ADVM's average pace of trading. 

Universal Display Corporation (NASDAQ:OLED) touched an all-time high of $230.32 just last week, but the shares have already pulled back significantly since this peak. OLED stock suffered two huge daily slides in the sessions after the milestone, and today it's off another 7.7% at $178.26. This price action is a result of Susquehanna's note, which cut the equity's rating to "negative" from "neutral," and its price target to $130 from $210.

Looking closer, the brokerage firm believes cost increases could slow the penetration of OLED screens, specially in the smartphone market. In response, OLED has fallen below the 100-day moving average for the first time in seven months, a trendline that served as strong support during that last two pullbacks.

Most analysts are already bearish on Universal Display, with just two of the nine in coverage recommending to buy the shares. Options traders, on the other hand, have been bullish across the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The 10-day call/put volume ratio across these exchanges is 3.10, and ranks in the 88th annual percentile -- showing a stronger-than-normal demand for long calls.

While all of this has been happening, short sellers have been hitting the exits, as part of a multi-month exodus from these traders. In the last two reporting periods alone, short interest declined by 22.2%.

 

Caterpillar Inc. (NYSE:CAT) and Deere & Company (NYSE:DE) were both downgraded to "market perform" from "outperform" at Wells Fargo, which said it believes "U.S. construction equipment demand is at or near peak," and that slow-to-flat growth in other divisions of the companies "will put downward pressure on earnings power." The brokerage firm also cut its CAT price target to $143 from $150, while maintaining its $170 price target on DE stock.

Most analysts are already bearish on CAT, with 10 of 15 calling the Dow stock a "hold" or "strong sell" prior to today. Plus, the average 12-month price target of $142.52 is a slim 7% premium to last night's close.

Elsewhere, several options traders set a short-term floor for the construction stock. The September 121 put saw the biggest increase in open interest over the past two weeks, due mostly to heavy sell-to-open action this past Tuesday, Sept. 10. CAT stock is down 1.7% at $130.77 this morning, but is holding above its 200-day moving average, currently located at $130.17.

DE stock, meanwhile, is off 2.1% at $161.69, holding near the site of its Aug. 1 bear gap. It's been a more volatile-than-usual stretch for the security, per its 30-day historical volatility of 36.6%, which registers in the 73rd annual percentile.

And while analysts are mostly upbeat toward Deere -- two-thirds maintained a "buy" or better rating through last night's close -- options traders have been initiating long puts relative to long calls at an accelerated clip. This is per the stock's 10-day put/call volume ratio of 1.57 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks above 74% of comparable readings taken in the past year.

Today, it looks like speculators are using call options to bet bearishly on Deere. Amid heavy volume -- the 6,100 contracts traded so far is three times what's typically seen -- the weekly 9/13 165-strike call is most active. Traders appear to be selling to open these weekly calls, betting on DE stock staying south of $165 through expiration at the close tomorrow, Sept. 13.

Upbeat trade buzz has stocks higher at midday. Three stocks making especially big moves are drugmaker Tocagen Inc (NASDAQ:TOCA), biomaterial name SINTX Technologies Inc (NASDAQ:SINT), and men's apparel retailer Tailored Brands Inc (NYSE:TLRD). Below, we'll take a look at what's driving the shares of TOCA, SINT, and TLRD. 

TOCA Stock Hits Record Low After Cancer Drug Flops 

The shares of Tocagen touched an all-time low of $0.73 earlier, last seen down 79.7% at $0.85, after the firm said a late-stage study for its brain cancer treatment did not meet its main goal. The news got the attention of Baird, which lowered its rating to "neutral" from "outperform," and slashed its price target to $1 from $20. H.C. Wainwright and Cantor Fitzgerald also downgraded the stock to "neutral."

Should today's downside continue, some other members of an overwhelmingly bullish brokerage bunch could follow this lead. Prior to today's massive drop, six analysts called the stock a "strong buy," while only one said it's a "hold." And despite Baird's huge price-target cut, the consensus 12-month price target sits all the way up at $11.19. 

Analyst Bull Note Gives SINT Stock a Lift

The shares of SINTX Technologies are eyeing their biggest one-day jump in over a year, after Ascendiant Capital initiated coverage with a "buy" rating, and a $3 price target -- double last night's close. The stock managed to hit this price target earlier with a four-week high of $3.14, before running out of steam at its 80-day moving average. The stock is now up 68.7% at $2.53, but is not far removed from last Friday's all-time low at $1.25. 

Tailored Brands Stock Sinks Post-Earnings

TLRD is sinking today after the retailer suspended its dividend and offered a lower-than-anticipated third-quarter profit outlook -- offsetting second-quarter earnings and revenue that exceeded expectations. The security has fallen from yesterday's three-month peak, now down 26.2% at $5.29, testing recent support at its 20-day moving average. 

Despite this drop, B. Riley hiked its price target by $1 to $6, lifting the stock's consensus 12-month price target to $6.97 -- a 31% premium to current levels. The two analysts in coverage, however, still call TLRD a "hold."

TLRD options traders have been active today. There are 9,235 calls across the tape so far -- double the number of puts, and four times what's typically seen at this point. It looks like most of this action is surrounding the September 6 call, but it's not clear if these positions are being opened or closed.

Schaeffer's Senior Market Strategist Matthew Timpane recently sat down with Christopher M. Uhl, CMA, from the How to Trade Stocks and Options podcast. The two discussed some of our favorite topics here at Schaeffer's, and some of the most important things we believe options traders should be considering when looking for potential targets.

To be more specific, Timpane talks about term structures and how to play certain market events on the cheap, selling premium versus buying premium, and finding an edge in every trade. Whether you're an experienced options trader or new to the game, this in-depth conversation offers valuable tips that you should consider. They also hit on why we love obscure moving averages.

If you're interesting in hearing more about our data and trading approach, make sure to check out our Monday Morning Outlook each week, along with our other free investing newsletters, and our various trading services. And for more stock market podcast action, subscribe to Schaeffer's Stock Market podcast for quick updates on business news.

 

The shares of Fibrocell Science Inc (NASDAQ:FCSC) are booming on a buyout deal from Castle Creek Pharmaceutical. The privately held company has agreed to acquire Fibrocell Science for about $63.3 million. In response, the penny stock has tacked on 60.1% to trade at $2.93, eyeing its highest close in over a year. 

On the charts, FCSC has been trading between $1.70 and $2.10 for the better part of 2019, with two brief breakouts capped by the stock's 320-day moving average in late March and early April. The stock is trading well atop this trendline today, though it's still well below the all-time high of $862.50, hit back in 2009. 

Only two analysts follow the stock, but both in coverage are extremely bullish, giving FCSC a "buy" or better rating. What's more, the 12-month consensus price target of $15 hasn't been touched by the equity in nearly two years. 

Interestingly enough, short interest just dropped to a one-year low, down 30% in the last two reporting periods. The 518,836 shares sold short still account for a healthy 5.3% of FCSC's available float, however, and would take over two weeks to cover, at the security's average pace of trading. 

Wedbush upgraded Etsy Inc (NASDAQ:ETSY) stock to "outperform" from "neutral," and raised its price target to $66 from $64 -- a 20% premium to last night's close. The brokerage firm waxed optimistic on the online marketplace's pre-holiday season launches of Etsy ads and free shipping could improve gross merchandise sales (GMS) and margins.

Most analysts are already bullish on ETSY, with 10 of 14 maintaining a "buy" or better rating prior to today, and not a single "sell" on the books. Plus, the average 12-month price target of $76.29 is a 34% premium to current trading levels.

Options traders appear upbeat, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ETSY's 50-day call/put volume ratio of 4.89 registers in the 87th annual percentile, meaning calls have been bought to open over puts at an accelerated clip.

Drilling down on the past two weeks, the November 60 call has seen the biggest increase in open interest. Data from the major options exchanges points to buy-to-open activity here, meaning speculators are targeting a breakout above $60 over the next two months.

At last check, ETSY stock is up 3.7% at $56.89, poised for its fifth straight win -- or longest winning streak since mid-June. The shares have surged more than 19% since last week's bounce near $48, and are set to close back above their 80-week moving average, after a rare dip below this trendline last week.

The shares of Southwest Airlines Co (NYSE:LUV) are up 2.2% to trade at $56.17, after Macquarie upgraded the airliner to "outperform" from "neutral." The analyst in coverage touted the company's new revenue management system, which could boost efficiency once the grounding of its Boeing 737 Max fleet ends. 

Should today's price action hold, Southwest stock will have accomplished a lot today. For starters, it would be a fifth straight win and the equity's best week since July 2018. A historical outperformer in September, LUV is up 7.2% this month and now eyeing its highest close since March. Lastly, the shares are set to take out the $55 level on a closing basis today, an area that turned away rallies in April and July. 

The door is wide open for more bullish analyst attention that could keep the wind at the security's back. There are 17 analysts covering LUV, and 10 rate the stock a "hold" or "strong sell." In addition, the consensus 12-month price target of $59.82 is just a slim  7.2% premium to last night's closing perch at $54.98. 

Now might be the time to speculate on Southwest's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 22% is in the 10th percentile of its annual range. This means near-term options are currently pricing in relatively low volatility expectations.