Buzz Stocks: Lululemon Athletica inc., Starbucks Corporation, and Horizon Pharma PLC

Today's stocks to watch include Lululemon Athletica inc. (LULU), Starbucks Corporation (SBUX), and Horizon Pharma PLC (HZNP)

by Alex Eppstein

Published on Jan 12, 2016 at 9:17 AM

Updated on Jun 24, 2020 at 10:16 AM

U.S. stocks look ready to start the day on the right foot, as crude futures edge into positive territory. Among the equities in focus are yoga apparel retailer Lululemon Athletica inc. (NASDAQ:LULU), coffee concern Starbucks Corporation (NASDAQ:SBUX), and drugmaker Horizon Pharma PLC (NASDAQ:HZNP).

LULU is poised to break out today, after the retailer boosted its fourth-quarter earnings and revenue forecasts due to strong holiday sales. Adding to the bullish bias, no fewer than seven analysts raised their price targets on the stock. Ahead of the bell, Lululemon Athletica inc. has advanced 8.7% after closing Monday at $54.73 -- which should help the shares bounce back from a rough finish to 2015. Short sellers could get burned on a gap higher in the stock. After all, over one-quarter of LULU's float is sold short, representing one week's worth of trading activity, at typical volumes. Later today, the company will make an appearance at the ICR Conference in Orlando.

SBUX said it plans to open 500 new stores in China this year, sending the shares 1.6% higher in electronic trading. This is good news for shareholders, who have seen the stock lose 3.7% year-to-date to trade at $57.82. However, option traders may not be so pleased. Starbucks Corporation's Schaeffer's put/call open interest ratio (SOIR) checks in at 1.37 -- higher than 99% of all comparable readings in the prior year, suggesting short-term speculators have rarely been so put-skewed. Echoing this, during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SBUX has amassed a put/call volume ratio of 0.70 -- in the 82nd percentile of its annual range.

HZNP is pointed 8.6% higher ahead of the open, after the biotech upwardly revised its 2016 adjusted earnings and sales outlook. On the charts, the stock -- which finished yesterday at $18.09 -- was recently rejected by its descending 100-day moving average, and has surrendered 21.7% since initially hitting the trendline in late December. As such, option traders have been betting bearishly on Horizon Pharma PLC of late. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.61 registers just 5 percentage points from an annual peak.

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