Fitbit Stock Eyes Best Day in Months on Google Partnership

Disney's latest film brought in record global sales in its opening weekend

Apr 30, 2018 at 2:50 PM
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The Dow has erased its triple-digit lead, as sector headwinds for Verizon (VZ) offset a positive earnings reaction for McDonald's (MCD). The blue-chip index isn't the only one seeing volatile trading today, with Dow stock Walt Disney Co (NYSE:DIS), wearable technology maker Fitbit Inc (NYSE:FIT), and biotech Celgene Corporation (NASDAQ:CELG) all making big moves. Here's a closer look at how shares of DIS, FIT, and CELG are trading.

Disney Stock's Avengers Rally Meets Familiar Resistance

Walt Disney stock is up 1.5% to trade at $100.68, sitting at the top of the Dow alongside MCD and Apple (AAPL). Boosting the shares is news the media giant's "Avengers: Infinity War" brought in a record $641 million globally in its opening weekend, even with the film not hitting theaters in China until May 11.

Today's positive price action marks a sharp change of pace for DIS stock, though, which has shed more than 11% since its mid-January highs near $113. Plus, the shares were swiftly rejected earlier by the overhead 40-day moving average, which has served as a reliable ceiling since February.

Nevertheless, options traders have been furiously initiating long calls relative to puts over the past two weeks. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 4.51 -- in the 100th annual percentile.

The May 125 call has seen the biggest rise in open interest over this time frame, though it's likely any buy-to-open activity at this deep out-of-the-money strike could be at the hands of short sellers. These bearish bets surged 14% in the two most recent reporting periods to 33.34 million shares -- the most since October 2016.

Fitbit Stock Paces for Strongest Day Since February

Fitbit users will soon be able to store data from their wearable devices on Google's Cloud Healthcare API, with news of the collaboration sending FIT stock up 5.7% today to trade at $5.60. While this puts the equity on track for its biggest one-day percentage gain since mid-February, its running out of steam near its 200-day moving average -- a trendline that served as support late last year.

The stock could see some volatile trading later this week, too, with Fitbit slated to report first-quarter earnings after the close this Wednesday, May 2. The shares have swung 14.1% on average over the past eight quarters, including a 12.2% drop this past February and a 12.1% surge following its results one year ago. This time around, the options market is pricing in a 17.5% post-earnings move in either direction.

Celgene Stock Has a History of Negative Earnings Reactions

Morgan Stanley said it thinks Celgene will delay any new filings for its key multiple sclerosis drug, ozanimod, up to three years, and that the drugmaker will likely have to gather more pre-clinical data. This comes after the Food and Drug Administration (FDA) rejected the drug back in February, citing insufficient data. In reaction, CELG stock is down 4.2% today to trade at $87.35, after earlier coming within striking distance of its April 3 three-year low of $84.25.

This is just more of the same for a stock that's down 30% year-over-year -- and more downside could be in store after the company reports earnings this Friday morning. CELG stock has had a negative earnings reaction in four of the past five quarters, averaging a loss of 5.5%. And with 15 analysts still maintaining a "strong buy" recommendation on the biotech, a round of post-earnings downgrades could create even bigger headwinds.


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