Guidance-Induced Boom Sends JD.com Inc (JD) Bears to the Exits

JD.com Inc (ADR) (JD) traders are unwinding their skeptical bets amid the stock's sharp gains

by Alex Eppstein

Published on Nov 16, 2015 at 3:00 PM
Updated on Jun 24, 2020 at 10:16 AM

JD.com Inc (ADR) (NASDAQ:JD) is booming this afternoon, thanks to better-than-expected current-quarter sales guidance -- which is overshadowing the company's surprise third-quarter loss. At last check, the stock has advanced over 10% to trade at $29.47, while in the options pits, puts are running at three times the anticipated afternoon rate.

Looking more closely, JD's most active strike is the out-of-the-money November 24.50 put. Based on the data, traders may be selling to close these positions, in an attempt to limit their losses ahead of Friday night's expiration.

In recent months, though, it's calls that have held a decisive advantage over puts. JD's 50-day call/put volume ratio of 2.41 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 82nd percentile of its annual range. Echoing this, the equity's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.58 -- lower than all but 37% of comparable readings from the past year. In other words, short-term speculators are more call-skewed than usual.

As alluded to, JD.com Inc (ADR) (NASDAQ:JD) is having a fantastic day, from a technical perspective -- unlike this e-tail rival. However, the shares' upside momentum continues to stall at JD's 120-day moving average, which served as support in late July and early August, but has transitioned to resistance in recent weeks.

A Schaeffer's 39th Anniversary Exclusive!

8 Top Stock Picks for 2020

Access your FREE insider report before it's too late!


  
 
 

Partnercenter