Target Tanks on Holiday Forecast, While Acorda Goes Red for 2017

Options traders were call-heavy on Target stock ahead of earnings

Managing Editor
Nov 15, 2017 at 10:13 AM
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U.S. stocks are trading lower this morning, with equities taking their lead from tumbling oil prices. Among the stocks making moves today are retailer Target Corporation (NYSE:TGT), car parts manufacturer SORL Auto Parts, Inc. (NASDAQ:SORL), and pharmaceutical concern Acorda Therapeutics Inc (NASDAQ:ACOR). Here's a closer look at what's moving shares of TGT, SORL, and ACOR.

Target Falls on Disappointing Holiday Forecast

Shares of Target briefly moved higher in premarket trading as investors reacted to the retailer's third-quarter earnings beat, but the stock quickly reversed course in response to a holiday-quarter forecast that's largely below analysts' estimates. TGT is off 8.7% at $54.87, gapping below the recent support of its 80-day moving average. Target stock is now down 24% on the year.

Ahead of earnings, Target options traders were showing optimism. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows TGT with a 10-day call/put volume ratio of 2.28, which ranks in the 70th percentile of its annual range. This suggests that calls have been bought to open over puts at a faster-than-usual rate during the past two weeks.

SORL Soars on Third-Quarter Earnings Beat 

SORL Auto Parts stock is soaring after reporting a fiscal third-quarter earnings beat before today's open. SORL is up 28.7% at $7.71 at last check, bringing its year-to-date gain to 153.6%.

Today's bull gap could be due to a short squeeze situation. Short interest on SORL rose 16.8% during the past two reporting periods, and now represents more than 20% of the stock's available float. At SORL's average daily trading volume, it would take four days for shorts to cover their bearish bets. 

ACOR Falls After Patient Deaths in Parkinson's Trial

Shares of ACOR have plummeted in response to the company's negative trial results for its Parkinson's drug, tozadenant, with enrollment of new patients halted after seven cases of sepsis and five fatalities. Acorda stock is down 37.2% at $17.70, with the shares gapping below the support of their rising 20-day moving average -- and on pace to close below this trendline for the first time since early September. Following today's plunge, ACOR stock is now back in negative territory on a year-to-date basis -- off 5.9% for 2017, after closing Tuesday's session up 50% on the year.

Despite an 18% drop in short interest during the past two reporting periods, there are still plenty of Acorda bears left to benefit from this share price plunge. A solid 14.4% of the equity's float remains dedicated to short interest, representing 9.7 times ACOR's average daily volume.


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