Housing Stock Plummets on Forecast; FB Stock Extends Losses

ARNA, meanwhile, is headed toward its best day since March

Nov 15, 2018 at 1:49 PM
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Stocks have come off their earlier lows, though the Dow is on track to extend its lengthy losing streak. Among individual names making notable moves today are social media stock Facebook, Inc. (NASDAQ:FB), homebuilder KB Home (NYSE:KBH), and drugmaker Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). Here's a quick roundup of what's moving the shares of FB, KBH, and ARNA.

Facebook Stock is Churning Beneath a Key Trendline

Facebook stock is trading down 1.6% at $141.90. This comes after a scathing New York Times report questioned the ways CEO Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg were said to have handled reports of Russian interference in the 2016 U.S. presidential election.

Today's negative price action is just more of the same for FB stock, which has been in a channel of lower highs and lows since its late-July bear gap -- pressured by its descending 20-day moving average. Short sellers have been betting on even bigger losses for Facebook, too. Short interest rose 6.4% in the two most recent reporting periods, but the 28.35 million shares sold short accounts for just 1.2% of the equity's available float. More short selling could drive the FAANG stock even lower.

KB Homes Cited Rising Interest Rates, Home Prices for New Guidance

KB Home lowered its current-quarter and full-year housing revenue forecasts, citing rising interest rates, home prices, and delayed deliveries and closings in California due to the wildfires. Analysts have been quick to chime in, too, with no fewer than five cutting their KBH price targets -- including Credit Suisse to $16 from $18.

At last check, KBH stock is down 18.2% to trade at $17.01, earlier hitting a 21-month low of $16.82. Amid accelerated options activity today, some speculators are targeting even more downside through week's end. Specifically, it looks like the November 18 put is being bought to open for a volume-weighted average price of $0.52, making breakeven at tomorrow's close $17.48 (strike minus premium paid).

Arena Pharmaceuticals Rallied Right Into 200-Day Trendline

Arena Pharmaceuticals said it has sold the rights to its hypertension drug to United Therapeutics (UTHR) for an upfront payment of $800 million. ARNA said it intends to use the proceeds to prepare the launch its bowel disorder drugs -- a move Cantor Fitzgerald says will "accelerate the pace of asset development."

ARNA is up 21.4% at $39.49 -- on track for its best day since March -- after earlier running into familiar resistance at its 200-day moving average, which emerged as ceiling following back-to-back bear gaps in early October. Analysts, meanwhile, remain upbeat toward the stock, with five of six in coverage maintaining a "buy" or better rating. Plus, the average 12-month price target sits all the way up at $61.67.


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