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5 Stocks Making Noise In the Auto World

Checking in on Fiat Chrysler Automobiles NV (FCAU), General Motors Company (GM), Maxwell Technologies Inc. (MXWL), Ford Motor Company (F), and Tesla Motors Inc (TSLA)

Sep 15, 2015 at 3:36 PM
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Automakers are causing a stir today, as Wall Street watches contract negotiations, weighs a few partnerships, and eyes the latest from the International Auto Show in Frankfurt. Among the equities making noise in the auto arena are Fiat Chrysler Automobiles NV (NYSE:FCAU), General Motors Company (NYSE:GM), Maxwell Technologies Inc. (NASDAQ:MXWL), Ford Motor Company (NYSE:F), and Tesla Motors Inc (NASDAQ:TSLA). 

FCAU is up 3% at $14.76, as the company continues to negotiate with the United Auto Workers (UAW). The union delayed calling for strikes at U.S. Fiat locations, and has extended its old agreement "on an hour-by-hour basis" (subscription required). Outside of Teamster Talk, FCAU led an 11.5% increase in overall European car registrations in August, according to a Brussels-based agency, with Fiat registrations surging 13.9%. 

Should FCAU ink a deal with the UAW, a mass exodus of short sellers could help the stock add to its year-to-date lead, which currently stands at 27.5%. Short interest represents 16 sessions' worth of pent-up buying demand, at Fiat Chrysler Automobiles NV's average pace of trading. 

GM -- which is being pursued by Fiat CEO Sergio Marchionne -- is cautiously higher as traders await a union precedent from FCAU. The stock was last seen up 1.2% at $31.09, and option players are betting on even more short-term upside. GM calls are trading at 1.8 times the average intraday rate, with potential buy-to-open activity spotted at the September 31.50 strike. 

Assuming the traders are "vanilla," their goal is for GM to surmount the $31.50 level by Friday's close, when front-month options expire. If the contracts were bought at a volume-weighted average price (VWAP) of $0.39, the buyers will reap a profit on a move north of $31.89 (strike plus VWAP). However, GM has struggled to surmount the $32 region in the third quarter, and could run into a wall in the form of its 40-month moving average. 

Energy storage concern MXWL is up 15.5% at $5.90 -- on track for its best day in more than a year -- after General Motors Company adopted its ultracapacitor-based voltage stabilization system (VSS), marking the first U.S. automaker to do so. A short squeeze could be helping MXWL's cause; short interest accounts for 15% of the stock's float, and would take more than 17 sessions to unwind, at the equity's average daily trading volume. 

Plus, short-term option bears could also hit the bricks. Maxwell Technologies Inc.'s Schaeffer's put/call open interest ratio (SOIR) of 2.37 indicates that puts more than double calls among options expiring within three months. What's more, this ratio stands higher than 91% of all other readings from the past year, pointing to a bigger-than-usual put bias among near-term traders. 

F has advanced 2.7% to dock at $14.15, as speculators watch the FCAU/UAW negotiations and digest a deal with Alcoa Inc (NYSE:AA). The stock is set to end atop its 20-day trendline for the first time since the August bloodbath, and an extended rebound could catch some recent option bears off guard. The security's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 0.73 -- in the 97th percentile of its annual range. Simply put, option buyers have picked up Ford Motor Company puts over calls at a near-annual-high clip during the past two weeks. 

Finally, TSLA has been a wet blanket in the auto sector today. The stock has fluctuated between minor gains and losses, and was last seen fractionally higher at $253.52. Speculators might be spooked by the latest luxury electric vehicles unveiled in Frankfurt, with Porsche's Mission E car making a serious splash. In addition, Tesla Motors Inc shares are facing double-barreled resistance in the $250-$254 region, home to their 10-week and 20-week moving averages. 

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