Stocks On the Move: Ciena Corporation, Restoration Hardware Holdings Inc, and Walgreen Company

CIEN, RH, and WAG are moving sharply in Thursday's trading

Dec 11, 2014 at 11:48 AM
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Around midday, three of the top market movers are networking equipment maker Ciena Corporation (NYSE:CIEN), home furnishings expert Restoration Hardware Holdings Inc (NYSE:RH), and drugstore chain Walgreen Company (NYSE:WAG). Here's a quick roundup of how CIEN, RH, and WAG are performing on the charts so far.

  • CIEN has spiked 9.5% to trade at $18.57, as stronger-than-expected quarterly sales trumped a surprise fourth-quarter loss. This intraday surge is putting the hurt on short sellers. Roughly 19.5% of Ciena Corporation's float is dedicated to short interest, which would take more than seven sessions to repurchase, at typical daily trading levels. Longer term, though, the equity has been a technical laggard. CIEN is sitting more than 22% below its year-to-date breakeven mark.

  • RH has run to a 13.6% lead at $97.93, and earlier touched a record high of $99.44, following last night's third-quarter earnings beat and upwardly revised full-year forecast. Further boosting the shares is a slew of price-target hikes from KeyBanc (to $100), CRT Capital (to $100), Raymond James (to $96), and Nomura (to $110), which all reiterated the equivalent of "buy" suggestions. Despite Restoration Hardware Holdings Inc's strength on the charts, about one-third of the stock's float is sold short -- which would take nearly three weeks to buy back, given the security's typical daily trading volume. In other words, RH could continue to run higher on short-covering activity.

  • WAG is up nearly 5% to perch at $71.45, bringing its year-to-date lead beyond 24%. The rally follows news that the drugstore chain's CEO will retire after the planned purchase of European peer Alliance Boots. Options traders, meanwhile, have been upping the bearish ante at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Walgreen Company's 10-day put/call volume ratio of 1.18 across these three exchanges ranks in the 86th percentile of its annual range, suggesting traders have bought to open puts over calls at a faster-than-usual rate recently. Although some of these puts may have been purchased by WAG shareholders as insurance, a capitulation among the "vanilla" bears could result in tailwinds. Looking ahead, the company will report fiscal first-quarter earnings before the open on Tuesday, Dec. 23.

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