Defense Stock Rallies as President Trump Looks to Space

President Trump called for the expansion of the U.S. missile strategy earlier today

Managing Editor
Jan 17, 2019 at 2:59 PM
facebook X logo linkedin


Stocks are confidently in the black at midday, flipping higher despite a subpar earnings report from banking giant Morgan Stanley. Among names making notable moves higher are defense stock Northrop Grumman Corporation (NYSE:NOC), healthcare concern Five Prime Therapeutics Inc (NASDAQ:FPRX), and auto retailer Cars.com Inc (NYSE:CARS). Below, we'll take a look at what's moving the shares of NOC, FPRX, and CARS.

NOC Headed Toward Fourth Straight Weekly Win

Earlier today, President Donald Trump announced an overhaul of the U.S.' missile defense strategy, with an added emphasis on experimental space-based sensor missiles. In response, defense stocks across the board are higher, and Northrop Grumman is up 3.1% to trade at $263.57 at last check. The shares are on track for their fourth straight weekly win, and barring any sudden pivot will close above their 50-day moving average for the first time since mid-October. 

In the options pits, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.52 sits in the 6th percentile of its annual range. So not only does call open interest roughly double put open interest among contracts expiring within three months, but the low percentile rank means that near-term option traders have rarely been more call-biased during the past year. Of course, we'll want to check back on this reading soon, since the January series is set to expire tomorrow.

Upgrade Fueling FPRX's Best Week Since September 2017

Five Prime Therapeutics stock is up 8.9% to trade at $10.93, after Wedbush upgraded the biotech name to "outperform" from "neutral." The analyst in coverage glowed about the company's pipeline, as well as its pancreatic cancer therapy. FPRX is on track for its best week since September 2017, and today could topple its 40-day moving average on a closing basis for the first time in over a month. Nevertheless, the equity still has a year-over-year deficit of roughly 50%. 

Meanwhile, short interest declined by a quarter in the last two reporting periods to  16.14 million shares. However, this still represents nearly 6% of the equity's total available float. 

CARS Stock Pops on Sales Talk

Cars.com announced today that it was exploring a potential sale. The news, which had been urged at by investors at a meeting last month, has sent CARS up 5.8% to trade at $24.48 at last check. Stoking the bullish flames is an upgrade to "buy" from "hold," as well as a price-target hike to $30 at Craig-Hallum, which believes a sale could mean a much higher valuation. The stock earlier gapped as high as $26, but has moved back below its 80-day moving average, a trendline that served as a stiff ceiling since early August. 

A capitulation from bears could power CARS even higher. Short interest fell by 8.4% in the last two reporting periods to 13.18 million shares, the lowest since 2005. However, this still represents 22% of the equity's total available float, and almost 13 days of pent-up buying power, at its average pace of trading.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI