Buzz Stocks: NVIDIA Corporation, Merck, and Medivation

Futures are in the red this morning, as traders digest a fresh round of economic data -- as well as a merciless month for China's Shanghai Composite. Among specific equities in focus are semiconductor concern NVIDIA Corporation (NASDAQ:NVDA), as well as drugmakers Merck & Co., Inc. (NYSE:MRK) and Medivation Inc (NASDAQ:MDVN).

• NVDA -- which will take its turn in the earnings confessional after next Thursday's close -- announced today it is recalling about 83,000 of its 8-inch Shield tablets due to a potential battery fire hazard. The news is having little impact on NVDA in electronic trading, with the stock lingering near last night's close at $20.02. Longer term, the security has been consolidating in the $19-to-$20 region since hitting a four-year high of $23.60 in late March. Option traders, meanwhile, having been upping the bearish ante in recent months -- which could be to their detriment, if history is any guide. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NVIDIA Corporation's 50-day put/call volume ratio of 1.20 ranks just 1 percentage point from a 52-week peak.


• It's been a big week for MRK on the fundamental front, and today, Wall Street is digesting reports that the blue-chip's fast-tracked experimental Ebola vaccine has been 100% effective in its Guinea trial. At last check, the shares were up 1.4% ahead of the bell -- after settling Thursday at $58.52 -- and edging toward their Jan. 13 12-year peak of $63.62. In the options pits, short-term speculators are more put-skewed than usual, per Merck & Co., Inc.'s Schaeffer's put/call open interest ratio (SOIR) of 0.82, which sits higher than 72% of all similar readings taken in the past year. Echoing this is MRK's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.78, which rests in the 74th annual percentile.


• News of a 2-for-1 stock split has shares of MDVN up 12% in electronic trading -- and poised to pop back above the century level, their 320-day moving average, and their year-to-date breakeven mark. In fact, each of these areas were comprised earlier this week, when reports suggesting slowing demand for the company's cancer drug, Xtandi, were met with bearish backlash from the brokerage bunch. Overall, analysts are bullish on Medivation Inc, with 10 "strong buys" versus three "hold" or worse ratings. Plus, the average 12-month price target of $137.40 stands at a 42% premium to Thursday's close at $96.97.

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