The shares of Entera Bio Ltd. (NASDAQ:ENTX) are up 26.3% in electronic trading, after the biotech name announced a licensing deal with Amgen (AMGN) to collaborate on oral treatments for inflammatory diseases and other serious illnesses. Entera will receive up to $270 million in milestone payments, and will retain all property rights to its oral drug delivery technology.

Today's premarket upside has ENTX stock eyeing its best day ever, and trading near the top of the Nasdaq today. The shares are set to open at their highest point since mid-October, though the shares remain well below Entera Bio's late-June initial public offering (IPO) price of $8 per share.

Analysts have been relatively quiet on the Wall Street newcomer. Currently, only one brokerage firm is covering the stock, rating it a "buy" and maintaining a $12 price target, more than double Monday's closing price of $5.49.

Travelers Companies Inc (NYSE:TRV) is trading up 0.9% this morning at $124.18, trying to overcome a bear note out of RBC. The brokerage firm downgraded the insurance giant to "sector perform" from "outperform" and dropped its price target to $133 from $143. Citing the California wildfires and Hurricane Michael, RBC lowered its fourth-quarter earnings-per-share estimates for TRV, and is expecting weak pricing and a slowing economy to act as headwinds going forward.

All the same, RBC's price target is a premium to the equity's Monday close of $123, as the blue chip has continued to struggle on the charts. It touched an annual low of of $119.74 back in late October, and breakout attempts have been thwarted by the 200-day moving average since late August. In fact, TRV has essentially been in a series of lower highs since peaking near $150 back in February.

These technical struggles have prompted even more skeptics to take action. Most notably, there's been unusual put buying on Travelers during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), where the put/call volume ratio for that period stands at 6.20 -- high enough to rank in the 94th annual percentile. Said simply, many have been speculating on the stock moving lower.

Short interest has also been picking up. In the last reporting period, short interest on the security increased by 13.1%, though it still represents just 1.4% of the overall float. Considering this latter number, there's theoretically plenty of room for more short sellers to roll in, which would just add more pressure to TRV on the charts.

Leerink initiated coverage on CVS Health Corp (NYSE:CVS) with an "outperform" rating and $100 price target -- a 36.4% premium to last night's close. The brokerage firm called concerns over the company's in-house pharmacy benefits manager (PBM) exaggerated, and waxed optimistic over CVS' cost savings forecast following its Aetna buyout.

In reaction, CVS stock has shot up 2.5% to trade at $75.15, bouncing off its year-to-date breakeven mark and rising 120-day moving average. This trendline served as a ceiling back in April, but more recently caught a late-October pullback alongside the stock's 200-day moving average. Longer term, CVS Health has gained 25% since its late-March lows near $60, though its Jan. 29 annual high of $83.87 has contained recent breakout attempts.

Most analysts remain bullish toward CVS, with 11 of 15 maintaining a "buy" or better rating at last night's close, and not a single "sell" on the books. Plus, the average 12-month price target sits all the way up at $93.

Elsewhere on Wall Street, skepticism has been growing toward the equity. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CVS' 10-day put/call volume ratio of 0.80 ranks in the 94th annual percentile. While this shows that calls have outpaced puts on an absolute basis, the rate of put buying has been faster than usual.

Meanwhile, short interest is up almost 82% year-to-date to 59.83 million shares -- the most since late 2007. These bearish bets account for nearly 6% of CVS Health stock's available float, or 7.7 times the average daily pace of trading.

Taco Bell parent Yum! Brands, Inc. (NYSE:YUM) has shown resiliency during the recent broad-market sell-off, with all pullbacks since mid-October neatly contained by the stock's rising 80-day moving average. What's more, the security found a new layer of support at its +10% year-to-date return during last week's retreat from its Dec. 3 record high at $93.24.

 

In spite of YUM's technical tenacity, eight of the 14 analysts covering the stock maintain a lukewarm "hold" rating. This leaves the door open for upgrades, which could draw buyers to the table.

It's an attractive time to buy premium on YUM, too, per the stock's Schaeffer's Volatility Index (SVI) of 21% -- in the 23rd annual percentile, meaning short-term options are pricing in lower-than-usual volatility expectations. Plus, our internal quantitative data shows the combination of low implied volatilities and high stock price has had bullish implications for YUM shares in the past.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this YUM commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

December -- a historically bullish month -- started out rough for U.S. stocks, amid mixed signals on U.S.-China trade relations, concerns about bond yields and oil prices, and a high-profile arrest, just to name a few reasons. In fact, the S&P 500 Index (SPX) was down 4.44% as of yesterday's close, which marked the fifth trading session of the month, since Wall Street was shuttered last Wednesday, Dec. 5, to mourn President George H.W. Bush. That marks the worst December start for the stock market in decades.

Since 1950, there have been just eight other times when the SPX was down at least 2% in the first five sessions of December, per Schaeffer's Senior Quantitative Analyst Rocky White. The last time was 10 years ago, in December 2008, when the index was down 2.25% and U.S. stocks were in the throes of the financial crisis. This year's start marks the worst since December 1980. For context, December has historically been the best month of the year, looking at returns since 1950, with the index averaging a gain of 1.61%, and higher 75% of the time.

However, as you can see on the chart above, the SPX went on to enjoy positive rest-of-month returns every time but once, back in December 2002. Even in December 2008, the index posted a 3.1% return the rest of the month.

In fact, the worse December begins for stocks, the better it seems to end. Below you'll find S&P 500 December stats based on performance during the first five trading sessions. When the stock market barometer is down 2% or more, as it is now, it's went on to average a rest-of-month return of 1.65%, and was higher 88% of the time. That's much better than the other scenarios. For instance, when the index was up 2% or more to start the month, it averaged a rest-of-December gain of 0.9%, and was higher just 50% of the time.

In conclusion, bulls shouldn't give up hope for a Santa Claus rally. Bad starts to December typically end up resolving to the upside, not to mention the second half of the month has been the best time to own stocks, historically. From a technical standpoint, though, traders should watch the S&P's movement between the 2,600 and 2,800 levels for clues to future price action, per Schaeffer's Senior V.P. of Research Todd Salamone.

News that Tivity Health (TVTY) bought NutriSystem (NTRI) helped Weight Watchers International, Inc. (NASDAQ:WTW) stock snap a three-day losing streak yesterday. What's more, an analyst at DA Davidson said that based on the same valuation metrics of the NTRI deal, WTW stock is undervalued by 15% to 36%. Further, the analyst reiterated a "buy" endorsement and $137 price target, saying a "successful diet season outcome" could lift the shares when Weight Watchers reports earnings in February.

At last check, WTW shares were up 1.6% to trade at $49.94. The stock has been trading in a series of lower highs and lows since its record peak of $105.72 in mid-June. Its deep decline, facilitated by two dramatic bear gaps, has slashed the equity in half since then. More recently, the stock has been trading in the $45-$55 range since the November bear gap, attempting to stay north of its year-to-date breakeven marker at $44.28. 

Despite the equity's struggles in the second half of 2018, most analysts are already optimistic toward WTW. Eight of 10 analysts issue a "strong buy" rating, with not a single "sell" in sight. Weight Watchers stock has a ways to go before it hits analysts' consensus 12-month price target of $91.92, which stands at nearly an 85% premium to current levels. 

However, near-term options traders have taken a much more pessimistic stance lately. WTW's Schaeffer's put/call open interest ratio (SOIR) of 4.04 sits in the high 87th percentile of its annual range, showing put open interest quadruples call open interest among options expiring in the next three months. The lofty percentile suggests short-term traders have rarely been this put-heavy on Weight Watchers during the past 12 months.

 

 

The shares of Acorda Therapeutics Inc (NASDAQ:ACOR) are spiraling today, after Goldman Sachs downgraded the drug stock to "sell" from "neutral," and nearly halved its price target to $10 from $19 -- a roughly 50% discount to last night's close, and the lowest target on Wall Street. The brokerage firm expects Ampyra revenue to ease as generics for the multiple sclerosis drug hit the market, and sees lower-than-anticipated U.S. sales for ACOR's Parkinson's drug, Inbrija.

At last check, ACOR is trading down 15.1% at $16.16, set for its worst day since Sept. 10 -- when news of a regulatory hurdle for Inbrija sent the shares tumbling more than 24%. The security has now sliced through recent support in the $17 region, home to its negative 20% year-to-date return, and is closing in on its Sept. 13 annual low of $15.60.

Against this backdrop, it's not hard to see why most analysts are already bearish on Acorda Therapeutics. However, two of eight brokerages still maintain a "strong buy" rating on the stock, and the average 12-month price target sits all the way up at $22.11 -- suggesting more negative analyst notes could come down the pike.

Elsewhere, short sellers have been actively targeting ACOR stock, which has likely increased pressure on the shares. Short interest is up 88.5% from the Sept. 1 reporting period to 8.03 million shares -- the most in over a year. These bearish bets accounts for 17.2% of the equity's available float, or 11.5 times the average pace of trading. Shorts are sidelined at the moment, though, with Acorda Therapeutics short-sale restricted during today's bear gap.

The struggles of Amazon.com, Inc. (NASDAQ:AMZN) and its FAANG peers were well-documented amid the broad market sell-off. Today, though, AMZN is up 0.9% to trade at $1,654, after Cowen named the stock its best idea for 2019. More specifically, the brokerage firm waxed optimistic about the company's Prime and Amazon Web Services businesses, citing the former as the driver behind the long-term success of the company's retail business. 

As alluded to earlier, Amazon.com stock was not spared from the October bloodshed on Wall Street, shedding nearly 17% this quarter in total. However, the damage was contained late last month by the shares' 320-day moving average. AMZN has bounced since then, breaking out of a trendline of lower lows that started after its Sept. 4 record high of $2,050.50.

In the options pits, calls are still the preferred mode of action. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows AMZN with a 10-day call/put volume ratio of 1.25, which registers in the elevated 75th percentile of its annual range. This points to a healthier-than-usual appetite for bullish bets lately. Digging deeper, the weekly 12/14 1,700-strike call saw the largest increase in open interest during this time frame among contracts yet to expire, although it's unclear if these options were bought or sold. 

Whatever the motive, Amazon stock has been a strong target for premium buyers over the past year, based on its Schaeffer's Volatility Scorecard (SVS) of 87 (out of 100). This shows a tendency for the stock to make bigger-than-expected moves over the past year relative to options traders' expectations.

The shares of FedEx Corporation (NYSE:FDX) are down 1.2% in electronic trading, after BofA-Merrill Lynch downgraded the shipping name to "neutral" from "buy," while slashing its price target to $220 from $304. The analyst in coverage waxed pessimist on the company's management shakeup last week, namely the departure of the head of the company's Express unit. In short, the brokerage firm sees this as a possible signal of a delay in the company achieving its profit target.

FedEx stock is on track to open at a new annual low. The shares gapped lower last week after Morgan Stanley warned of "the risk Amazon Air poses," culminating in a Dec. 7 bottom of $200.12. As a result, last week was FDX's worst weekly performance since March 2009, bringing its 2018 deficit to 19%. 

Despite two bear notes in as many weeks, analysts on the whole are still quite bullish on FDX. Of the 19 brokerages covering the security, 16 rate it a "buy" or "strong buy," with zero "sells" on the books. What's more, the stock's consensus 12-month price target of $284.11 is a 41% premium to Friday's closing perch. 

As far as options, puts have become popular in recent weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows FDX with a 10-day put/call volume ratio of 0.96. This ratio registers in the 83rd percentile of its annual range, pointing to a healthier-than-usual appetite for bearish bets lately. 

The shares of Marinus Pharmaceuticals Inc (NASDAQ:MRNS) are up 11.2% to trade at $5.75, after the biopharmaceutical firm said its postpartum depression drug, ganaxolone, was well-tolerated in a mid-stage study, and that patients showed no serious side effects to the treatment.

Cantor Fitzgerald was quick to chime in, underscoring its "overweight" rating on MRNS stock, and raising its price target to $25 from $19 -- a 335% premium to current trading levels. This echoes the generally bullish bias among the brokerage bunch, with all four analysts in coverage maintaining the equivalent of a "strong buy" rating, and the average 12-month price target perched all the way up at $18.50.

On the charts, MRNS stock topped out at a three-year high of $10.54 on Oct. 1, before plummeting all the way down to a seven-month low near $4 by Nov. 27. The shares have now retraced 23.6% of this plunge, and are pacing for their highest close since Nov. 1.

A continued round of short covering could help Marinus Pharmaceuticals stock extend this recent bounce. Short interest is down almost 26% since its early July record peak, but there are 3.39 million shares still sold short. This represents a healthy 8.5% of the equity's available float, or 4.9 times the average daily pace of trading.

NutriSystem Inc. (NASDAQ:NTRI) stock is trading up 31.3% today at $44.90, following news the dieting expert is being bought by Tivity Health Inc (NASDAQ:TVTY) for $1.4 billion, or $47 per share. The shares had been trading around their downtrending 200-day moving average since early November, moving further away from their 52-week peak of $55.10 from last December.

This rally from NTRI stock may be a shock for all those shorting the name. Specifically, more than one-fifth of the float is held by short sellers, or more than nine times the average trading pace. Recent options traders had been bearish, too, with put buying more than tripling call buying during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

Mitek Systems, Inc. (NASDAQ:MITK) is also gaining today, trading up 12% at $10.05, after ASG Technologies Group raised its buyout offer for the financial technology firm to $11.50 per share from $10. Elliott Management-backed ASG said it made the offer public because Mitek has refused to engage in reasonable discussions about a takeover deal.

MITK stock is now trading in double-digit territory for the first time since January, with the $10 mark acting as a ceiling in recent months. Earlier, in fact, the equity touched an annual high of $10.16. Still, the shares have enjoyed tremendous upside since bottoming at $6.32 in early October. All four brokerage firms covering Mitek Systems have "strong buy" recommendations.

Meanwhile, Yelp Inc (NYSE:YELP) stock is trading 2.1% higher at $35.33, after major shareholder and hedge fund SQN Investors LP called for an overhaul of the company's board, and said it wants the review site to consider all options, including a sale (subscription required). The stock has underperformed this year, down roughly 16% in 2018 and touching a 52-week low of $29.35 a month ago.

Most analysts have already taken a skeptical view of YELP shares, with 16 of the 21 in coverage handing out "hold" or "strong sell" recommendations. In a similar vein, options traders have pushed the 10-day put/call volume ratio at the ISE, CBOE, and PHLX to 2.29 -- ranking in the bearish 94th annual percentile.

Just before the Thanksgiving holiday, the National Association of Active Investment Managers (NAAIM) exposure index was sitting at its lowest point since February 2016, at 30.55. In other words, active money managers were very limited in their overall equity exposure, as the S&P 500 Index (SPX) was testing its October lows. However, NAAIM bulls have re-emerged with a vengeance, with the index more than doubling to 61.96 in the past two weeks -- something we haven't seen in more than three years.

There have been just 11 signals of this kind since 2006, considering one signal every month, per Schaeffer's Quantitative Analyst Chris Prybal. Specifically, the last time the NAAIM index jumped 100% or more in two weeks was in October 2015. Prior to that, you'd have to go back to October 2014, when the index skyrocketed 650%. Of note, this signal also flashed in March 2009, what we now know was the start of a years-long bull run.

Historically, a notable rush of reinvigorated NAAIM bulls has preceded strong S&P 500 returns. A week after signals, the SPX was up 1.2%, on average, and was higher 70% of the time. That's more than 10 times the index's average anytime one-week return of 0.1%, looking at data since 2006. Two weeks out, the S&P was up an impressive 2.8%, on average, and was higher 90% of the time. That's compared to an average anytime one-week return of just 0.3%, with a 62% positive rate.

One and two months out, it's a similar story. The S&P was up an average of 2.7% and 2.6%, respectively, and was higher 80% of the time after signals. That's far better than its average anytime returns for both time frames. Six months and a year later, the index also generated bigger-than-usual average gains of 5% and 9%, respectively. Plus, those returns would be much larger, if not for the 2008 signals (of which there are three), when the stock market was in the throes of the financial crisis.

The lone outlier is the three-month marker, with the index down an average of 0.3%, and higher just 60% of the time. That's mostly due to the steep 30.1% loss suffered after the July 2008 signal.

In conclusion, these NAAIM signals have preceded big rallies for the S&P historically, with the exception of the intermediate-to-long-term returns during the financial crisis. However, the stock market's trajectory after the most recent signal will likely be determined by the S&P 500's price action around a pair of key long-term moving averages, per Schaeffer's Senior V.P. of Research Todd Salamone.