Stocks On the Move: NewLink Genetics Corp, Sears Holdings Corp, and Chipotle Mexican Grill, Inc.

NLNK, SHLD, and CMG are moving sharply in Monday's trading

Oct 20, 2014 at 11:39 AM
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U.S. stocks are trading on both sides of breakeven this morning, with the Nasdaq Composite (COMP) in the black and the blue-chip barometer in the red, due to an earnings miss from Big Blue. Among the names making significant moves are Ebola vaccine maker NewLink Genetics Corp (NASDAQ:NLNK), department store operator Sears Holdings Corp (NASDAQ:SHLD), and fast-casual restaurateur Chipotle Mexican Grill, Inc. (NYSE:CMG). Here's a quick look at how NLNK, SHLD, and CMG are faring on the charts today.

  • NLNK is 19.4% higher at $35.05, after the firm announced a potentially lucrative agreement with Roche Holding AG to develop NLNK's cancer therapy. The stock has now added 59% so far in 2014, and today's rally could have quite a few bears hitting the exits. Short interest edged 9.3% higher during the past two reporting periods, and now accounts for 30.4% of NewLink Genetics Corp's total available float. In fact, it would take more than 16 sessions to repurchase these pessimistic positions, at the equity's average pace of trading -- ample fuel for a short-covering rally. Of course, considering the affinity for long calls of late, some of those shorts may be hedged.

  • SHLD is up 7.4% at $30.51, thanks to plans to boost liquidity with help from CEO Eddie Lampert. Nevertheless, SHLD remains more than 22% lower year-to-date, and has underperformed the broader S&P 500 Index (SPX) by more than 23 percentage points during the past three months. As such, it's no surprise to find optimism toward Sears Holdings Corp is relatively sparse. Short interest accounts for almost 35% of the security's total available float, and option buyers on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been upping the bearish ante. In fact, the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.43 stands higher than 77% of all other readings from the past year, pointing to a healthier-than-usual appetite for long puts over calls during the past two weeks.

  • CMG is flirting with a 1.5% gain at $651.50, as buyers step in ahead of the firm's quarterly earnings release tonight. Intraday options volume is running at twice the normal pace, and the stock's 30-day at-the-money implied volatility is 1.1% higher at 40.6%, reflecting a growing demand for short-term options ahead of earnings. Echoing that, eight of the 10 most active options expire at Friday's closing bell, with last-minute positions being established at the deep out-of-the-money weekly 10/24 500-strike put and 700-strike call. Technically speaking, Chipotle Mexican Grill, Inc. has tacked on more than 22% in 2014, and major post-earnings reactions aren't outside the realm of possibility; the shares gapped 11.8% higher after the company's last go-round in the earnings spotlight in July.

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