Bulls Keep the Faith in Wal-Mart Stores, Inc., Verizon Communications

Wal-Mart Stores, Inc. (WMT) and Verizon Communications Inc. (VZ) calls are popular today

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Published on Apr 17, 2015 at 2:13 PM
Updated on Jun 24, 2020 at 10:16 AM

Dow components are really struggling today on overseas news. Among the 29 blue chips sitting in negative territory are Wal-Mart Stores, Inc. (NYSE:WMT) and Verizon Communications Inc. (NYSE:VZ), but option bulls continue to seek upside for both stocks.

WMT is currently sitting on a 1.4% deficit at $78.14, but the retailer's calls are being exchanged at more than double the usual intraday rate. Seeing likely buy-to-open activity are the May and June 80 calls, with buyers gambling the shares will muscle atop $80 by the respective expiration dates.

Looking at the charts, the underfoot $78 level has been crucial for WMT in the past. The area contained a number of rallies in 2014, and could now switch roles to act as support. Should this happen, the stock could benefit from a potential round of upgrades, as 16 of 21 analysts rate WMT a "hold" or worse.

Meanwhile, VZ is off a modest 0.5% at $49.04, amid news of a new pay TV plan. Longer term, the shares are up nearly 5% year-to-date.

On the options front, VZ calls are trading at 1.2 times what's expected at this point in the afternoon. Potential buy-to-open activity is detected at the in-the-money June 46 call, as speculators bank on the stock to resume its uptrend by June options expiration.

Analysts are far more bullish toward Verizon Communications Inc. (NYSE:VZ) than they are toward Wal-Mart Stores, Inc. (NYSE:WMT). In fact, 17 of 23 brokerage firms rate VZ a "buy" or better, compared to six "holds" and not a single "sell."


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