VRX, WB, FSLR Stocks On the Move Today

Weibo is sinking with its fellow Chinese internet stocks

Jun 22, 2017 at 1:50 PM
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Stocks are trading higher amid a jump in oil shares and healthcare names. Drugmaker Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is one name surging up the charts, while Chinese social media stock Weibo Corp (ADR) (NASDAQ:WB) and alternative energy company First Solar, Inc. (NASDAQ:FSLR) are also making volatile moves. Here's a quick look at what's moving shares of VRX, WB, and FSLR.

VRX Call Options Explode as Stock Breaks Out

Valeant shares are on track to notch a monster gain in June. Today alone, VRX is trading up 12.7% at $15.29, bringing its month-to-date advance to 27%. While no apparent news seems to be moving VRX shares, it's possible there's some short covering in play. Despite declining 6.8% in the most recent reporting period, short interest still accounts for a lofty 16.4% of Valeant's float.

Whatever the reason, the rally has sparked a rush toward calls among VRX options traders. Roughly 152,000 calls have traded on Valeant so far -- six times what's typically seen -- with buy-to-open activity detected at the weekly 6/23 14-, 14.50-, and 15-strike calls. If this is the case, call buyers are betting on more upside for VRX stock through expiration at tomorrow's close.

WB Stock Sinks as China Clamps Down

U.S.-listed shares of WB have plunged 5.8% to trade at $72.50. This follows reports that Chinese regulators have ordered several of the country's social media sites, including Weibo, to shut down audio and video streaming services, saying political content violates state rules. Nevertheless, WB stock is maintaining a 78% year-to-date lead, and seems to have found a foothold in the $69-$70 region, home to a mid-May bull gap and its 40-day moving average.

Bullish or bearish, it's a good time to target Weibo options. This is according to the stock's Schaeffer's Volatility Index (SVI) of 44%, which ranks in the bottom quartile of its annual range. In other words, low volatility expectations are being priced into near-term options.

FSLR Stock Gets a Lift on Trump's "Solar Wall" Idea

After finding a firm layer of support atop its 40-day moving average earlier this week, First Solar shares have jumped nearly 12% -- including a 6.3% pop today to trade at $39.59. Solar stocks may be getting a lift from President Donald Trump, who has recently speculated about building a "solar wall" along the U.S.-Mexico border, "so it creates energy and pays for itself."

And while the round $40 is containing today's upside -- a level that rejected a late-May rally attempt -- FSLR options traders are eyeing a near-term breakout. More than 18,000 calls have changed hands on the equity at last check, triple the average intraday rate, and it looks like new positions are being purchased at the weekly 6/23 and 6/30 38.50-strike calls.

 

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