Square Inc (NYSE:SQ) is trading 1.1% higher this morning at $74.75, after Macquarie began coverage on the stock with an "outperform" rating and $94 price target. The brokerage firm said that the company makes accepting payments as simple as signing up for Netflix, making it easier for people to run their businesses. Despite a year-over-year lead of 38% from SQ, the majority of covering analysts have "hold" or worse ratings on the shares.

Looking closer at the charts, the security has struggled to move past the $75-$80 area since gapping below the level back in October. However, the rising 50-day moving average has caught up with the equity, and the 200-day moving average has been providing impressive support since January. For reference, Macquarie's $94 price target is below the stock's record high of $101.15 from Oct. 1.

Meanwhile, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) suggests that speculators have been betting on more upside for the shares. SQ's 10-day call/put volume ratio across the exchanges is 3.30, standing as an annual high. In other words, call buying has never been more popular relative to put buying in the past year.

Interestingly, the May 90 call saw the largest increase in open interest during the past two weeks, but data shows most of these contracts were sold to open. This tells us that some options traders see the $90 level as a technical ceiling for the stock in the weeks ahead.

As it stands now, the equity's Schaeffer's Volatility Index (SVI) of 41% ranks in the low 12th annual percentile, showing volatility expectations are muted at the moment, and it's seemingly better to be buying premium at the moment. Moreover, SQ's Schaeffer's Volatility Scorecard (SVS) is an elevated 94 out of a possible 100, revealing it's consistently made bigger moves over the past year compared to what the options market has priced in.

Biopharmaceutical concern Axsome Therapeutics Inc (NASDAQ:AXSM) is hot today, on news the U.S. Food and Drug Administration (FDA) gave the company's AXS-05 major depressive disorder (MDD) treatment "breakthrough therapy" status. The designation was sparked by the treatment's successful Phase 2 ASCEND study results.

Now up 484.3% year-to-date, AXSM stock has been soaring since that positive drug data sent the shares up 161.2% on Jan. 7. While the equity briefly pulled back to its 40-day moving average in late February, it has since more than doubled. What's more, Axsome stock just hit a new all-time high of $16.80 earlier, last seen up 9.2% at $15.66. 

Analysts are resoundingly optimistic on ASXM. Currently, the stock holds three "strong buy" ratings. Plus, the consensus 12-month target price of $27 is at a 72.4% premium to current levels.

Short sellers, on the other hand, have ramped up their bearish exposure to the equity. Short interest rose 40.5% in the last two reporting periods, and now represents 15.2% of the stock's available float. It would take almost a week to buy back these pessimistic positions at AXSM's daily trading volume, leaving plenty of room for a short squeeze. 

 

 

 

Wingstop Inc (NASDAQ:WING) stock is up 2.3% to trade at $73.43, responding positively to BMO initiating coverage on the restaurant chain with an "outperform" rating and $85 price target. The analyst spoke glowingly about the company, calling it a "unicorn" due to a "combination of long-tailed unit growth and superior operating/growth metrics." 

Wingstop stock nabbed a record high of $73.97 on March 22, and now boasts a 12-month gain of over 58%. During this time frame, pullbacks in August, December, and February were all contained by the shares' ascending 160-day moving average. 

A short squeeze is likely fueling this recent rally. Short interest fell by 2.6% in the most recent reporting period to 3.90 million shares. However, this accounts for a healthy 13% of WING's total available float, and more than a week's worth of pent-up buying power, at the security's average pace of trading.

Despite the equity's steady rise on the charts, analysts have been skeptical to come forward with bull notes, with five of the 11 brokerages covering WING rating it a "hold" or "sell." And while BMO's price target represents significant upside to the record high, the security's consensus 12-month price target of $70.17 is a 2% discount to last night's closing perch of $71.76. 

Although volume tends to run light, options traders should note that premiums are attractively priced at the moment. Specifically, WING's Schaeffer's Volatility Index (SVI) of 31% ranks in the 8th percentile of its annual range. In other words, near-term options are pricing in relatively low volatility expectations.

The shares of Centene Corp (NYSE:CNC) are spiraling, after the U.S. health insurer said it was buying rival WellCare Health Plans (WCG) in a cash-and-stock deal valued at $17.3 billion, including debt. The purchase is expected to boost CNC's Medicaid division, as well as its exposure to the Medicare Advantage market, and comes amid a renewed effort from the Trump administration to repeal Obamacare.

At last check, CNC shares were down 7.4% at $50.80, on track for their fourth straight loss. The stock is down 12.1% year-to-date, but the round $50 level appears to be emerging as support, though, a region that marks Centene's early 2018 lows.

Options traders have been quick to react, with roughly 18,000 calls and 3,507 puts on the tape -- 20 times what's typically seen at this point, and total options volume already at a new 52-week peak.

Most active is the April 55 call, where it looks like speculators could be selling to open the options. If this is the case, they're setting a short-term ceiling for CNC stock. Traders could also be anticipating a volatility crush. Short-term volatility expectations have spiked today, per Centene's 30-day at-the-money implied volatility of 37.1% -- in the 96th percentile of its annual range.

It's a busy news day for Southwest Airlines Co (NYSE:LUV), which became the first airline to cut its first-quarter revenue per available seat mile (RASM) forecast after the Boeing 737 MAX 8 planes were grounded following a pair of fatal crashes. Also, LUV reported an emergency landed of the aircraft yesterday, though no passengers were on board. And later today, the Federal Aviation Administration (FAA) will testify in front of a Senate subcommittee over the 737 MAX 8.

At last check, LUV is up 2.6% at $50.01, even after receiving a price-target cut at Cowen and Company to $55 from $58. Coming into today, a majority of analysts supported the airliner, with 61% of covering firms sporting "buy" or better recommendations. Plus, the stock's average 12-month price target of $61.44 represents expected upside of 23% to current levels.

Digging deeper, LUV puts have been a popular pick for options traders, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), where the stock holds a 10-day put/call volume ratio of 1.42. This top-heavy ratio ranks in the 97th percentile of its annual range, meaning puts have been purchased over calls at a faster-than-usual clip of late.

Looking at its technical background, Southwest stock has shed nearly 22% since touching an annual peak of $64.02 in late September. The shares have struggled to fill a late-October bear gap, with a failed mid-January attempt putting LUV on its most recent leg lower. Year-to-date, the stock remains 7.2% above breakeven.

It's been a blazing hot start to 2019 for the U.S. stock market, with the S&P 500 Index (SPX) pacing for a first-quarter gain of 12.5%. History suggests this positive price action will continue in the near term, considering April is a seasonally strong month for stocks. Nevertheless, a number of individual names have struggled to capitalize on the broader tailwinds, including FAANG name Alphabet Inc (NASDAQ:GOOGL), which is down 0.4% today at $1,192.31, on news European Union (EU) lawmakers are supporting copyright reforms.

While these are the best stocks to own next month, below is a list of the 25 worst SPX stocks in April, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. To land on the list, a stock had to have at least eight years of returns. GOOGL is the only FAANG stock on the table.

Specifically, GOOGL stock has finished seven of the last 10 Aprils in negative territory, averaging a loss of 0.8%. While this is relatively modest, another move of this magnitude to the downside would have Alphabet stock testing the $1197 region -- home to its early March highs. The equity eventually broke out above $1,220, around its fourth-quarter peak, but has since pulled back below its 10-day moving average.

There's plenty of optimism to be unwound, should GOOGL turn in another April underperformance -- which could create even bigger headwinds for the shares. While 27 of the 28 analysts covering Alphabet stock maintain a "buy" or better rating -- with not a single "sell" on the books -- the average 12-month price target of $1,343.26 is well above GOOGL's July 27 record high of $1,291.44.

Teva Pharmaceutical Industries Ltd (NYSE:TEVA) is in the news today, after OxyContin maker Purdue Pharma and several members of the Sackler family, which own the company, reached a $270 million settlement with the state of Oklahoma over a 2017 lawsuit that accused Purdue Pharma, Johnson & Johnson (JNJ), and Teva Pharmaceutical of deceptive marketing practices that helped fuel an opioid abuse epidemic. Claims against JNJ and TEVA are still pending.

TEVA stock has struggled to find direction in the wake of the news, trading on both sides of breakeven today. At last check, the equity was up 0.2% at $15.93, looking to snap its two-day losing streak. Longer term, the shares have shed more than 21% since an unsuccessful test of the round $20 region and 320-day moving average in early February, with a recent rally attempt quickly contained by the security's 30-day trendline.

Nevertheless, call volume has exploded today, with nearly 107,000 contracts on the tape -- 12 times the average intraday amount and 32 times the number of puts exchanged. Trade-Alert highlights a bold play using the January 2020 17.50-strike and 22.50-strike calls, where more than 100,000 contracts have collectively traded.

Specifically, it looks as if one trader bought to open 40,000 17.50-strike calls for $1.65 each, while simultaneously selling to open 60,000 22.50-strike calls for 42 cents apiece. Trade-Alert suggests by initiating the 2x3 call ratio spread, the speculator is targeting a move to $22.50 by January 2020 options expiration, a 41% rally from current levels.

Yoga apparel retailer Lululemon Athletica inc. (NASDAQ:LULU) is down 1.1% at $145.03 in afternoon trading, as traders gear up for the company's fourth-quarter earnings -- set for release after the market closes tomorrow, March 27. Below, we will take a look at dig into how LULU has been faring on the charts, and see what the options market is pricing in for the stock post-earnings.

Lululemon Athletica stock has added an impressive 20.5% in 2019, and touched a four-month peak of $158.67 on Feb. 13. However, a pullback from here has the shares below their 50-day moving average, which ushered LULU lower in the fourth quarter.

Looking into LULU's earnings history, the retail stock has closed higher the day after its quarterly report in all but two of the past eight quarters, including a 16.3% surge last June. Over the past two years, the shares have swung an average of 12.6% the day after earnings, regardless of direction. This time around, the options market is pricing in a larger-than-usual 16% move for Thursday's trading.

Moving onto options data, LULU's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at a top-heavy 1.28, and ranks in the 61st percentile of its annual range. This suggests calls have been purchased over puts at a slightly faster-than-usual pace during the past two weeks.

Echoing this sentiment is the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.84, which ranks in the 24th percentile of its annual range. This shows a stronger-than-usual call-skew among near-term options. The April 150 call has been particularly popular among call buyers, and is home to peak open interest on LULU stock.

Shares of the Chinese e-commerce company Baozun Inc (NASDAQ:BZUN) have slowly been making a comeback after hitting new annual lows towards the end of December. Now, the stock is up 28.4% year-to-date, and in today's session has gained 1.7% to $37.53. However, it's not too late to get in on BZUN's comeback -- the stock just pulled back to a key trendline that, if history is any indicator, could mean more upside for the stock. 

Taking a look at the charts, BZUN stock lost nearly 13% in the couple days following its earnings miss in early March, which brought the equity in touch with its 40-day moving average. Following its initial bounce from this support, the stock again on Monday closed within one standard deviation of its 40-day trendline after a lengthy period of trading above it.

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, BZUN stock has flashed this signal nine other times in the past three years. The equity has finished positive one month later after each signal, with a hefty average gain of 23.5% over this time frame. From BZUN's current perch, a similar move would place the security right around $46.35 by this time next month -- an area it hasn't touched since Oct. 1. 

While short sellers are starting to peel away, the 12.13 million shares sold short still represent 33.2% of the stock's available float. It would take over six days to cover these pessimistic positions at the stock's average daily trading volume, leaving plenty of room for additional tailwinds on the charts. 

A similar unwinding of pessimism among options players on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX)  could propel BZUN higher, too. Baozun currently sports a 50-day put/call volume ratio of 0.66 that stands in the 80th percentile of its annual range, indicating a bigger-than-usual appetite for puts over calls of late.

Traders may want to consider call options to speculate on the equity's short-term trajectory. BZUN's Schaeffer's Volatility Index (SVI) of 51% sits in only the 7th percentile of its annual range. From a volatility perspective, this implies that front-month options are unusually cheap at the moment.

The Dow is modestly higher today, thanks to a resurgent tech sector. Of the stocks making particular noise today, blue chip McDonald's Corp (NYSE:MCD), biotech Aldeyra Therapeutics Inc (NASDAQ:ALDX), and mining name Freeport-McMoRan Inc (NYSE:FCX) are all climbing. Here's a quick look at what's got the shares of MCD, ALDX, and FCX moving higher today.

McDonald's Buys Dynamic Yield

Late Monday, McDonald's announced its acquisition of Israeli digital start-up Dynamic Yield, which MCD will use to help personalize and enhance the customer experience by making its drive-thru menus more dynamic. In response, MCD is up 0.8% to trade at $187.15 today, on track for its highest close in two months. Despite only boasting a 5.4% lead year-to-date, the equity has turned in only three weekly losses in 2019.

Options are an intriguing route for prospective MCD traders, given their affordability at the moment. The stock's Schaeffer's Volatility Index (SVI) of 17% ranks in the 24th annual percentile, showing lower-than-usual volatility expectations are priced into near-term contracts.

Outstanding Eye-Drug Trials Power ALDX to Best Day in Years

Near the top of the Nasdaq sits Aldeyra Therapeutics, up 40% to trade at $9.96, and on track for its best day since September 2017. ALDX has now broken out of a channel of lower lows that culminated in a seven-month closing low of $7.14 on Monday.

Fueling the surge is the company's eye drug reproxalap, which met its main and secondary goals in a late-stage trial. The next steps for the treatment will be discussed later in 2019, but Cantor Fitzgerald was sufficiently encouraged to hike its price target to $35 from $30 while reiterating its "buy" rating.

Today's sharp gains are likely being fueled by a short squeeze. Short interest fell by 22% in the last two reporting periods to 680,000 shares -- but still represents a healthy 14.5% of ALDX's total available float, or 2.2 times the equity's average daily volume.

FCX Stays Hot Despite Price-Target Cut

Freeport McMoRan stock is up 2% to trade at $12.62, shaking off a price-target cut to $12.50 from $13 at Deutsche Bank. Despite adding 22.4% year-to-date, FCX has spent the past month trading in a tight range between $12 and $13. In the past two weeks, the equity has turned in only two negative sessions, both of which were cushioned by support at its rising 50-day moving average.

Broader analyst sentiment can best be described as middling. Five brokerage firms rate FCX a "buy" or better, and six rate it a "hold" or "strong sell." Likewise, the security's 12-month consensus price target of $14.23 sits in territory not seen since early October. but represents a fairly modest 12.8% premium to FCX's current price.

Shares of Conn's Inc (NASDAQ:CONN) have reversed their premarket gains, last seen down 6.3% at $22.36, after the company reported a fourth-quarter earnings beat, but fell short of revenue expectations as same-store sales declined 1.4% for the period. Today's post-earnings plunge has CONN stock retreating from a test of resistance at its overhead 120-day moving average, which hasn't been bested on a daily closing basis since Oct. 9. 

As of last night's close, all six analysts covering CONN held "strong buy" recommendations. This sentiment is echoed within the stock's average 12-month price target of $36, which represents more than 50% upside to current levels. Given the equity's sharp reversal, any bearish notes from this group could spark additional selling pressure on the retailer's shares.

Lastly, short interest surged 33.2% during the two most recent reporting periods on CONN, and now represents a healthy 27.2% of the stock's total available float. However, with the shares down more than 10% at their early lows of the session, bears are temporarily restricted from shorting CONN -- which means pessimistic players may turn their attention to the stock's put options in the short term.

The shares of Cronos Group Inc (NASDAQ:CRON) are 1.7% lower at $20.18 this morning, after the cannabis concern posted a wider-than-expected fourth-quarter loss. Revenue also missed the consensus forecast, even as it soared 248% year-over-year. 

CRON stock hit an all-time-high of $25.10 in early February, and came back within striking distance of this milestone in early March. The shares have since consolidated near the round $20 mark, home to the security's rising 50-day moving average. 

Analysts are cool on the stock, with the majority of the seven in coverage giving it a tepid "hold" rating. Plus, the consensus 12-month target price of $16 is at a roughly 20% discount to current levels. 

On the options front, near-term puts are more popular than usual. CRON's Schaeffer's put/call open interest ratio (SOIR) of 1.79 sits in the 99th percentile of its annual range.

Likewise, Cronos stock sports a 10-day put/call volume ratio of 0.66 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 78th percentile of its annual range. This means that puts have been being bought to open relative to calls at a faster pace than usual in recent weeks.