Stocks On the Move: SunPower Corporation, JinkoSolar Holding Co., Ltd., and Peabody Energy Corporation

SPWR, JKS, and BTU are moving sharply in Thursday's trading

by Karee Venema

Published on Nov 13, 2014 at 1:54 PM
Updated on Apr 20, 2015 at 5:32 PM

Markets have resumed their quest for record highs today, however, not all stocks are participating in the day's bullish bias. Among specific equities making notable moves to the downside are alternative energy issues SunPower Corporation (NASDAQ:SPWR) and JinkoSolar Holding Co., Ltd. (NYSE:JKS), as well as coal concern Peabody Energy Corporation (NYSE:BTU). Here's a quick look at how SPWR, JKS, and BTU are performing on the charts so far.

  • SPWR was down 8% at its intraday low, but has since pared these losses to 3.8% to trade at $28.05, after offering up a dismal 2015 profit guidance, reducing its gross margin outlook, and upping its capital expenses forecast. Heading into today's session, the stock was down a modest 2.2% year-to-date, but it seems traders were bracing for a steeper plunge. In the options pits, for example, the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.78 ranks in the 98th percentile of its annual range. Simply stated, puts have been bought to open over calls with more rapidity just 2% of the time within the past year. Elsewhere, one-fifth of the security's float is sold short, and would take more than four sessions to cover, at SunPower Corporation's average daily pace of trading.

  • SPWR's sell-off has spread to other parts of the solar power sector, and as such, JKS is down 6.2% to churn near $20.90. Today's negative price action is just more of the same for a stock that's shed 29% in 2014, and lagged the broader S&P 500 Index (SPX) by more than 29 percentage points over the past two months. Option traders, however, have been initiating long calls over puts at a rapid-fire rate in recent weeks, per JKS' 10-day ISE/CBOE/PHLX call/put volume ratio of 107.56, which ranks higher than all other comparable readings taken over the past year. With 22% of the security's float sold short, though, a portion of this call buying may have been at the hands of short sellers hedging against any unexpected upside. Regardless, those purchasing premium on JinkoSolar Holding Co., Ltd.'s front-month options are currently paying a pretty penny, relatively speaking. The equity's Schaeffer's Volatility Index (SVI) of 84% ranks higher than 63% of similar readings taken in the past year.

  • BTU enjoyed a brief burst of buying power in the wake of a Republican win in midterm elections, but the equity has resumed its longer-term downtrend today, and was last seen 5.3% lower at $10.99. Year-over-year, in fact, the shares have surrendered 44% of their value. While short sellers have been quick to bet on a continued slide -- 18% of the stock's float is sold short, to be exact -- the brokerage bunch has been slow to climb on board BTU's bearish bandwagon. Of the 16 analysts covering Peabody Energy Corporation, nine maintain a "buy" or "strong buy" rating, versus five "holds" and just two "strong sells." Additionally, the consensus 12-month price target of $16.12 stands at a 47% premium to current trading levels -- and in territory not charted since late August. Should BTU's spiral continue, a round of downgrades and/or price-target cuts could translate into a fresh wave of selling pressure.

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