Options traders are call-heavy on UAL and AAPL
U.S. stocks are trading lower this morning, pressured by weakness in the tech sector. Among the stocks making moves this morning are United Airlines parent United Continental Holdings, Inc. (NYSE:UAL), tech powerhouse Apple Inc. (NASDAQ:AAPL), and drug concern Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP). Here's a closer look at what's moving shares of UAL, AAPL, and CRBP.
Shares of UAL Fall After Weak Q4 Forecast
Shares of UAL are down after the company reported better-than-expected third-quarter earnings late Wednesday, but warned of a sharp decline in fourth-quarter margins. The disappointing forecast has pushed the United Airlines parent down more than 4% to $65.21, and widened its year-to-date loss to more than 10%. The stock is retreating from resistance at its declining 20-week moving average.
Despite UAL's underperformance on the charts, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows call buying near peak levels. UAL's 10-day call/put volume ratio of 4.34 ranks in the 96th percentile of its annual range, suggesting calls have been heavily preferred over puts for the airliner during the past two weeks. If the stock continues to underperform on the charts, those bulls are likely to jump ship -- and the unwinding of bullish positions could push the shares even lower.
Apple Shares Plummet on iPhone 8 Demand Worries
Technology giant Apple is making headlines this morning as analysts express concerns over indications of lackluster iPhone 8 demand. What's more, a Wall Street Journal report indicates that Apple Watch users in China have been suddenly cut off from the device's cellular connection feature. At last check, AAPL is the biggest loser on the Dow this morning, with the shares trading down 2.5% at $155.76.
Today's negative news seems to have caught AAPL bulls off-guard. At the ISE, CBOE, and PHLX, Apple's 10-day call/put volume ratio of 2.62 ranks in the 91st percentile of its annual range, suggesting options traders have bought calls over puts at a faster-than-usual pace during the past two weeks. Furthermore, of the 29 analysts following the tech stock, 23 carry "buy" or better recommendations.
CRBP Bounces On Upbeat Drug Data
Shares of drug stock CRBP are soaring after the company reported positive results from a phase 2 dermatomyositis study for its experimental inflammatory disease treatment, anabasum. At last glance, the stock is trading up more than 14% at $8.00, having gapped well above support at its rising 50-day moving average at the opening bell.
Today's big surge higher for Corbus Pharma stock could be the result of a short-squeeze situation. Short interest accounts for 13% of the equity's float -- and at CRBP's average daily trading volume, it would take 12.7 sessions for all of these bearish bets to be covered.