Buzz Stocks: AbbVie Inc, EMC, and QUALCOMM

Today's stocks to watch in the news include ABBV, EMC, and QCOM

Oct 15, 2014 at 9:20 AM
facebook twitter linkedin


U.S. stocks are pointed lower ahead of the bell, as traders digest lackluster economic data and news of another Ebola case in the U.S. On the M&A front, today's stocks to watch include pharmaceutical firm AbbVie Inc (NYSE:ABBV), as well as tech issues EMC Corporation (NYSE:EMC) and QUALCOMM, Inc. (NASDAQ:QCOM).

  • ABBV is dominating pre-market headlines, after the firm said it's reconsidering its takeover of U.K. peer Shire PLC (ADR) (NASDAQ:SHPG) in the wake of Uncle Sam's attempts to curb tax inversions. Should ABBV abandon its bid -- and analysts at Bernstein think there's a 75% chance it will -- the firm would be on the hook for about $1.6 billion in breakup fees to SHPG, and some believe a U-turn could have broader implications for overseas M&A. AbbVie Inc's board will meet to discuss the merger on Monday, Oct. 20. Against this backdrop, ABBV shares are pointed 4.6% lower ahead of the bell, after settling at $54.13 on Tuesday, likely much to the delight of short sellers. Short interest increased by more than 19% during the past two reporting periods, and represents nearly nine sessions' worth of pent-up buying demand, at the stock's average pace of trading.

  • EMC is headed 1.2% lower, after landing at $27.61 on Tuesday, as traders weigh reports that Hewlett-Packard Company (NYSE:HPQ) has ended merger talks between the two. The shares of EMC Corporation are up nearly 10% in 2014, but have tumbled in step with the broader equities market of late, and are now testing support atop their 32-week moving average. The company will unveil its quarterly earnings before the open on Wednesday, Oct. 22, and if history is any indicator, the shares could stage a retreat. During the past eight quarters, EMC has averaged a one-week post-earnings loss of 1.3%. Nevertheless, analysts remain optimistic, with 21 out of 25 offering up "buy" or better endorsements.

  • Finally, QCOM is modestly lower in pre-market action, on news the company will pay $2.5 billion for British chipmaker CSR Plc, trumping rival Microchip Technology Inc. (NASDAQ:MCHP). A negative reaction on the charts would bode well for the recent crop of QUALCOMM, Inc. option bears, as the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.69 sits just 8 percentage points from an annual high. In other words, short-term options players have rarely been more put-biased during the past year. Technically speaking, QCOM has surrendered 3.2% in 2014, and is currently perched at $71.86, just north of its 20-month moving average.
 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial
 


 


 
Special Offers from Schaeffer's Trading Partners