Q2 STOCKS TO BUY

Analysts, Options Traders Upbeat Toward Post-Conduent Xerox Corp (XRX)

Shares of Xerox Corp (NYSE:XRX) are soaring, after the business support firm successfully completed its spinoff of Conduent

Jan 3, 2017 at 10:29 AM
facebook X logo linkedin


Shares of Xerox Corp (NYSE:XRX) have jumped 14.2% to trade at $6.57, after the company said it has successfully completed the spinoff of Conduent, which will now trade under the ticker "CNDT" on the New York Stock Exchange. The separation of XRX and Conduent -- which guarantees the former a cash transfer of $1.8 billion -- has the stock in the bullish limelight of analysts, as well. And while intraday options volume has yet to take off on XRX in the first trading day of 2017, most speculative players have been betting on a strong start to the new year.

Taking a quick look at this morning's bullish analyst notes, J.P. Morgan Securities raised its rating on XRX stock to "outperform" from "neutral" and its price target to $10.50 from $10.00. The brokerage firm specifically said the spinoff of Conduent "marks the start of a long turnaround process" for Xerox. Elsewhere, Credit Suisse boosted its rating to "outperform" from "neutral" -- while also lowering its price target by $2 to $8 -- saying it is "taking into account a more focused print business, potential upside to cost savings, strong management and a well laid out long-term strategy to offset end market decline."

Options traders, meanwhile, had already taken a glass-half-full approach to XRX in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 5,098 calls on XRX in the last 10 sessions, compared to 898 puts.

Seeing the biggest rise in open interest over this time frame was XRX's January 2009 9-strike call, with 4,694 contracts added. According to the major options exchanges, the majority of this action was of the buy-to-open kind, meaning traders are betting on a breakout north of $9 by front-month options expiration at the close on Friday, Jan. 20. As a point of reference, the last time XRX traded north of $9 was in the first quarter of 2015.

Looking at the charts, today's positive price action runs counter to XRX's recent trajectory. Based on last Friday's close at $5.75, the shares had surrendered more than 15% from their late-September high near $6.80. In fact, the $6.80 level -- which corresponds to a 61.8% Fibonacci retracement of the stock's 2016 high and low -- contained any breakout attempts in the latter half of the year. And while the stock's 14-day Relative Strength Index (RSI) closed out 2016 at 31 -- near oversold territory, suggesting a short-term bounce may be in the cards -- historical headwinds could keep Xerox Corp's (NYSE:XRX) Conduent-inspired gains in check.

XRX daily since january 2016

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.
 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter