Friday’s Vital Data: Twitter Inc (TWTR), Verizon Communications Inc. (VZ) and Opko Health Inc. (OPK)

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After three consecutive weekly gains, the major market indices are staring down a weekly loss after posting broad losses Thursday. The S&P 500 even breached potential short-term support at the 2,100 region — a level the index hasn’t closed a week below since mid-April. Options traders appeared less worried than expected, with the CBOE put/call volume ratio rising only modestly to 0.61 after hitting a two-month low yesterday. The 10-day moving average came in at 0.62.

Taking a closer look at options activity, volume rebounded overall, though activity at equity options barometer Apple Inc. (NASDAQ:AAPL) remained well below average. Twitter Inc (NYSE:TWTR) was popular among call traders despite TWTR stock receiving a bearish research note from Evercor ISI. Verizon Communications Inc. (NYSE:VZ) was also hit with negative analyst action, as JPMorgan downgraded VZ stock. Finally, Opko Health Inc. (NYSE:OPK) saw record options volume after the company announced its acquisition of Bio-Reference Laboratories Inc (NASDAQ:BRLI).

Friday’s Vital Data: Twitter Inc (TWTR), Verizon Communications Inc. (VZ) and Opko Health Inc. (OPK)

Twitter Inc (TWTR)

TWTR stock shed nearly 1% on Thursday after Evercore ISI analyst Ken Sena downgraded the shares to “hold” from “buy” while slashing his price target to $39 from $49 per share. According to Sena, Twitter’s user growth has narrowed, prompting the analyst to reconsider long-term projections for the firm. Sena also lower his fiscal 2016 revenue projections to $3.3 billion — a 50% year-over-year decline for Twitter.

Options traders appeared to take the news in stride, with volume coming in at roughly 158,000 contracts. What’s more, the majority (70%) of yesterday’s TWTR options activity traded as call contracts. Looking at weekly June 5 series options, TWTR may have trouble making any headway today due to potential options-related resistance, as roughly 10,000 contracts reside at each of the overhead $37, $37.50 and $38 call strikes.

The nearest weekly June 5 put with any notable open interest is the $36.50 strike, where 5,243 contracts reside. With TWTR stock trading lower heading into the open, this put option has a chance of finishing in the money by the close.

Verizon Communications Inc. (VZ)

VZ stock dipped nearly 2% on Thursday after JPMorgan analyst Phillip Cusick downgraded the stock to “neutral” from “overweight.” Cusick also maintains a price-target of $55, representing a premium of about 14% to yesterday’s close. The consensus price target rests at $52.

Yesterday’s drop pushed VZ below all of its major short-term moving averages and has left the stock in danger of breaching support near $48 — an area VZ has not closed beneath since mid-March. But options traders on Thursday appeared to hint at confidence for VZ, as 77% of the 150,464 contracts that traded on the stock crossed as call options.

Looking out to monthly June activity, the $50 strike is home to peak call open interest of 54,985 contracts, with another 11,142 calls residing at the $49 strike. On the put side, traders are focused on the $49 strike, with 9,340 contracts in open interest.

Opko Health Inc. (OPK)

Opko Health announced yesterday that it was buying Bio-Reference Laboratories for $1.47 billion in an all-stock deal. As a result, BRLI shareholders will eventually have their stock swapped out for OPK shares, diluting Opko shares. OPK stockholders expressed their displeasure at either the price tag or the dilution on Thursday, sending OPK down more than 15%.

Making its debut on the top-10 most traded options listing, OPK saw record short-term volume of 170,935 contracts. The activity had a slight bullish bias, with 55% of the day’s volume crossing on the call side. Looking at monthly June open interest levels, OPK traders have zeroed in on the $17 strike, with 12,330 call contracts and 10,646 put contracts open at this now overhead strike.

In premarket trading, OPK is recovering some of Thursday’s losses, rising 2.65% at last check.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/06/fridays-vital-data-twitter-inc-twtr-verizon-communications-inc-vz-opko-health-inc-opk-options/.

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