Buzz Stocks: JCPenney, WuXi PharmaTech, and Tesla

Today's stocks to watch include J C Penney Company Inc (NYSE:JCP), WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX), and Tesla Motors Inc (NASDAQ:TSLA)

Aug 14, 2015 at 9:24 AM
facebook twitter linkedin

U.S. stocks are lower ahead of the open, as traders await the latest batch of economic reports. Among the equities in focus are retailer J C Penney Company Inc (NYSE:JCP), China-based pharmaceutical stock WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX), and electric automaker Tesla Motors Inc (NASDAQ:TSLA).

  • JCP is ready to move 7.1% higher at the open, after the company posted strong second-quarter numbers and affirmed its full-year outlook. The stock has already outperformed in 2015, tacking on 24.5% to land at $8.07. Going into earnings, many options traders were betting against J C Penney Company Inc. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) , JCP's 10-day put/call volume ratio stands at an annual high of 2.18. In other words, put buying (relative to call buying) hasn't been more popular at any other point in the past year. 

  • On top of impressive second-quarter revenue figures, WX is getting a pre-market lift from news the company will merge with New WuXi Life Science Limited in a $3.3 billion agreement. Looking back, WuXi PharmaTech (Cayman) Inc. hit a seven-year high of $46.14 on May 14, and remains 22.7% above breakeven year-to-date, at $41.32. Speculators had been betting on a breakout. During the past 50 days at the ISE, CBOE, and PHLX, more than 7,000 calls have been bought to open, compared to just 422 puts. 

  • TSLA yesterday answered its post-earnings skid by announcing a $500 million stock offering. Apparently, that wasn't enough, as Elon Musk and Co. have increased the offering by 30%, to raise about $642 million. Tesla Motors Inc is now sitting 1.8% in the black in electronic trading. The shares settled at $242.51 yesterday, nearly 21% below their average 12-month price target of $293.07. Elsewhere, 60% of covering brokerage firms say TSLA is a "hold" or worse. The equity is 9% higher since the start of the year. 

Get the skinny on all the biggest stories of the morning… Sign up now to get Schaeffer's Midday Market Check delivered straight to your inbox!


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners