Call Traders Target These 3 Surging Stocks

DXC Technology is conducting a strategic review of its companies

Managing Editor
Nov 12, 2019 at 3:13 PM
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The S&P 500 and Nasdaq are trading at new highs today, as investors digest a speech from President Donald Trump at the Economic Club of New York. Among three stocks making notable moves higher today are IT specialist DXC Technology Co (NYSE:DXC), factory automation equipment maker Rockwell Automation (NYSE:ROK), and biopharmaceutical name Amarin Corporation (NASDAQ:AMRN). Here's a quick look at what's moving the shares of DXC, ROK, and AMRN.   

Strategic Review Triggers DXC Breakout

DXC Technology stock is up 17.9% to trade at $34.65, after the company said it is reviewing strategic alternatives for three of its businesses. DXC expects to utilize $4.25 billion or more to repurchase shares and pay dividends in the next few years. This is helping offset fiscal second-quarter earnings that fell short of expectations, as well a round of price-target cuts, including one to $32 from $40 at Susquehanna. DXC is heading toward its best day since May 2016, but is running out of steam at its 80-day moving average.

Call trading has ramped up in response. With just under 90 minutes left in trading, 14,000 calls have changed hands, five times the average intraday amount and almost triple the number of puts traded. Leading the charge is the March 25 call, where it looks like speculators may be liquidating their in-the-money positions.

ROK Beat-and-Raise Spurs New Annual High

One of the best stocks on the New York Stock Exchange (NYSE) is Rockwell Automation, up 10.7% to trade at $198.41, earlier snagging a new annual high of $207.11. This comes after the factory equipment maker reported fiscal fourth-quarter adjusted earnings and revenue that exceeded expectations. The company also upped its fiscal 2020 forecast, putting the stock on track for its best day since April 2009. 

ROK's usually quiet options pits have sprung to life. At last check, around 5,600 options have changed hands, 11 times the average intraday amount and volume pacing in the 99th percentile of its annual range. The November 210 call is most active, and it looks like new positions are being purchased here. 

AMRN Breaks Past Key Trendline After FDA Comments

Amarin stock is up 20.9% to trade at $20.44, after U.S. Food and Drug Administration (FDA) staffers said concerns the company's use of mineral oil as a placebo in a trial for its cholesterol drug, Vascepa, were found to be inconclusive. The drug will be evaluated by an independent advisory panel this Thursday, Nov. 14, and Citi thinks there's a strong likelihood it will be approved by year's end. AMRN is heading toward its highest close since mid-July, and has broken above resistance at its 200-day moving average. 

Options traders are rushing toward the surging stock, with the 180,000 contracts traded five times the average intraday amount. The most active option is the November 21 call, though it's not clear if positions are being opened or closed here. Buy-to-open activity has been detected at the November 22 call, where more than 5,000 contracts have crossed. 


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