Call Traders React to THC and JNCE Stock Rallies

Calls are popular on THC and JNCE stocks

Jul 24, 2019 at 2:27 PM
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U.S. stocks are mixed today during a huge session for earnings, though the Nasdaq managed a fresh record high. As for individual names to watch, healthcare stocks Edwards Lifesciences Corp (NYSE:EW), Tenet Healthcare Corp (NYSE:THC), and Jounce Therapeutics Inc (NASDAQ:JNCE) are all making outsized moves. Here's how EW, THC, and JNCE shares are trading today.

Edwards Lifesciences Tries to Snap Earnings Streak

EW stock is one of the biggest winners on the Street today, adding 8.5% to trade at $211.54, earlier hitting an all-time high of $219.71, after the heart valve specialist posted a second-quarter earnings beat and boosted its full-year forecast. This would snap a six-quarter post-earnings losing streak for the equity, which has mostly trended higher in 2019, sporting a year-to-date gain of 38.3%.

Many were playing the upside move in the shares of Edwards Sciences before earnings, based on the heavy levels of call buying seen at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) in the past two weeks. The 10-day call/put volume ratio comes in at 2.25, ranking in the bullish 76th annual percentile.

THC Shares Try to Rally

THC shares have spiked 11.3% to $19.55 thanks to news the company intends to spin off its subsidiary Conifer Health Solutions. However, the stock is still in its channel of lower highs that started back in April, and it's lost almost half its value year-over-year. The security has almost no support from analysts, and short interest accounts for 10.5% of the float.

Not surprisingly, options activity has picked up today, as traders adjust to the earnings update and stock move. In particular the weekly 7/26 series is popular, and new positions are opening at the 18-, 18.50-, and 19-strike calls.

Jounce Jumps on Celgene Deal

JNCE is trading 10% higher to $4.50 on news of the company's deal with Celgene (CELG), which is paying the company $50 million up front to develop its monoclonal antibody JTX-8064 -- something H.C. Wainwright believes validates Jounce Therapeutics. Longer term, Jounce Therapeutics has struggled on the charts, and today's rally has already pared back below the 50-day moving average, which has acted as resistance in recent months. Short interest is low, though, meaning an increase in short selling could be a headwind

There's notable action at the August 5 call, and depending on whether traders are buying or selling the contract, they could be betting on a rally, or predicting a level of chart resistance.


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