Post-Earnings Plunge Has Priceline On Pace to Test Key Trendline Support

Mylan tanked to a fresh four-year low after slashing its forecast

Aug 9, 2017 at 10:26 AM
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U.S. stocks have started the day on a negative note, pressured by rising tensions with North Korea and a post-earnings drop for Walt Disney shares. Travel reservation service Priceline Group Inc (NASDAQ:PCLN), pharma company Mylan N.V. (NASDAQ:MYL), and technology concern Microsoft Corporation (NASDAQ:MSFT) are three stocks in the news this morning. Here's a quick look at what's moving shares of PCLN, MYL, and MSFT.

Priceline Gaps Lower on Soft Guidance

After providing a lackluster third-quarter earnings forecast last night, Priceline received four price-target cuts from analysts -- most notably from Moffett Nathanson, with that firm's downwardly revised target of $1,850 implying expected downside of nearly 10% to Tuesday's close at $2,049.

Priceline, which just yesterday tapped a new intraday record of $2,067.99, is trading down 7.7% at $1,890.86. Today's bearish gap has PCLN stock on track to test support at its 80-day moving average, which previously cushioned the equity's lows in June and November.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMC PHLX (PHLX), options traders were notably skeptical heading into PCLN's earnings report. The stock's 10-day put/call volume ratio of 1.31 registers in the 100th annual percentile, marking near-peak levels of bearish speculation relative to bullish.

MYL Plummets to 4-Year Low Post-Earnings

MYL stock is tanking after a disappointing earnings report this morning, down 3.9% at $30.54. In addition to a quarterly profit miss, Mylan slashed its 2017 earnings guidance, and pushed all of its major U.S. product launches back to 2018. The stock traded as low as $29.58 earlier, marking its lowest price since June 2013.

Heading into MYL's earnings announcement, the stock's short-term options were pricing in extremely elevated volatility expectations. As of Tuesday's close, Schaeffer's Volatility Index (SVI) stood at a steep 70% -- in the 100th percentile of its annual range.

ValueAct Dumps Microsoft Shares

Disney isn't the only Dow stock making headlines this morning, with tech giant MSFT in focus after a regulatory filing revealed that ValueAct sold 7 million shares over the past week for over $500 million. Microsoft, which hit a record high of $74.42 in late July, was last seen trading down 0.6% at $72.32.

Unlike ValueAct, analysts remain extremely upbeat on Microsoft stock. Among the 24 brokerage firms following the stock, 18 maintain a "buy" or "strong buy" recommendation.

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