2 Stocks Staging Post-Earnings Bull Gaps

Dashed hopes for a Nokia bid have JNPR on pace to end a nine-day win streak

Emma Duncan
Nov 30, 2017 at 10:04 AM
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U.S. stocks are trading higher this morning, thanks to rebounding tech stocks and anticipation over a possible tax reform vote hitting the Senate floor this afternoon. Three stocks making notable moves today are big-time retailer Sears Holdings Corp (NASDAQ:SHLD), supermarket chain Kroger Co (NYSE:KR), and networking concern Juniper Networks, Inc. (NYSE:JNPR). Here's a closer look at what's moving shares of SHLD, KR, and JNPR.

Sears Stock Gaps Higher After Earnings

Shares of Sears have gapped higher, up 13.3% at $4.77, after the company reported a narrower third-quarter loss, even as same-store sales continue to drop. SHLD is now up about 32% from its Nov. 15 record low, but today's rally has so far been capped by the stock's descending 40-day moving average.

The retailer's surge on the charts today could be driven by some of the weaker bearish hands hitting the exits. Short interest on SHLD fell 5% during the past two reporting periods, but still represents nearly 64% of the stock's available float. At the stock's average daily trading volume, it would take more than 10 days for the shorts to cover all of their bearish bets.

Kroger Gets a Post-Earnings Boost

Kroger stock is soaring after the grocery chain reported a third-quarter earnings beat earlier, climbing 11% to $27.07 -- territory not seen since mid-June. KR recently touched a three-year low on Oct. 2, but has since jumped an impressive 37%.

Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows an influx of KR puts during the past two weeks. Kroger stock's 10-day put/call volume ratio of 1.46 ranks in the 70th percentile of its annual range, suggesting puts have been bought to open over calls at a faster-than-usual clip.

Echoing this, KR has a Schaeffer's put/call open interest ratio (SOIR) of 1.26, in the 88th percentile of its annual range -- meaning short-term options traders have rarely been more put-skewed in the past year.

JNPR Falls After Nokia Denies Buyout Rumors

Juniper stock's nine-day win streak is on track to end today after Nokia denied buyout talks were underway. Juniper stock is down 4.3% at $28.25, with the equity's six-month downtrend firmly intact. Today's drop puts the shares back into negative territory on a year-to-date basis.

Call players who bought into JNPR's 24% surge from its late-October intraday low of $23.87 are likely disappointed by today's sharp decline. Data from the ISE, CBOE, and PHLX shows JNPR sporting a 10-day call/put volume ratio of 9.40, which ranks in the 88th percentile of its annual range. This suggests that calls have been bought to open over puts at a faster-than-usual clip during the past two weeks.


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