Sears Stock Scorching Hot After Amazon Partnership

FAA audit has clipped American Airlines' wings

Patrick Martin
May 9, 2018 at 2:46 PM
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Stocks are surging today, as oil prices continue to climb. Retail giant Sears Holdings Corp (NASDAQ:SHLD) and cloud stock Twilio Inc (NYSE:TWLO) are soaring, while airliner American Airlines Group Inc (NASDAQ:AAL) is grounded. Here's a closer look at what has shares of SHLD, TWLO, and AAL moving today.

Sears Stock Higher After Scoring Amazon Tire Deal

Sears stock is up a whopping 20.3% to trade at $3.32, after the company announced it was teaming up with Amazon.com (AMZN) to provide tire service. Any customer who purchases tires on Amazon will now have access to full-service installation and balancing from Sears Auto Centers. SHLD stock is one of the best stocks on the Nasdaq today, and on track for its biggest single-day gain since March 2017. Since falling to a record low of $1.99 on Feb. 12, SHLD stock has tacked on 67%. 

A few short-term options traders could be caught off-guard today. Options traders have been more bearish than normal recently. SHLD's Schaeffer's put/call open interest ratio (SOIR) of 2.46 ranks in the 93rd percentile of its annual range, suggesting near-term traders are more put-biased than normal.

Twilio Stock Near Top Of NYSE After Earnings

Twilio stock is up 18.3% to trade at $52.46, one of the best stocks on the New York Stock Exchange today, after the software company reported first-quarter earnings and revenue that beat analyst estimates. In response, three brokerages chimed in with price-target hikes, including to $57 from $46 at Northland Capital. TWLO earlier touched a two-year high of $53.55, and has now more than doubled in the past year. The equity is currently on track to post its best single-session gain since June 2016. 

A short squeeze could give TWLO even more room to run. Short interest fell by 2.6% in the two most recent reporting periods, yet the 9.64 million shares still sold short represent nearly 15% of the stock's total available float, and nearly seven days of pent-up buying power, at TWLO's average pace of trading. 

FAA Audit Grounds American Airlines Stock

American Airlines stock is down 2.6% to trade at $41.87, amid reports that the U.S. Department of Transportation is conducting an audit of Federal Aviation Administration (FAA) maintenance oversight on AAL and Allegiant Travel Company (NASDAQ:ALGT). Specifically, the audit will look into the FAA's "processes for investigating allegations of improper maintenance practices" by the pair of airlines, following a negative "60 Minutes" story on Allegiant. AAL stock has now given back nearly 20% in 2018, and remains dangerously close to its annual low of $40.65, which it touched on April 26, after earnings. 

Despite the stock's struggles lately, in the options pits, calls continue to be overwhelmingly popular. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows AAL with a 10-day call/put volume ratio of 7.46, which ranks 2 percentage points from an annual high. Given that short interest has increased by 13% in the most recent reporting period, its possible some of this call buying could be shorts hedging against any unexpected short-term upside.

 

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