Monday’s Vital Data: Apple Inc. (AAPL), Facebook Inc (FB) and Netflix, Inc. (NFLX)

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The major market indices ended July on a sour note, with only tech stocks on the Nasdaq holding their ground. Despite the end-of-month losses, the S&P 500 closed in positive territory for both the week and the month.

The selling on Wall Street drove options traders to grow a bit more cautious heading into the weekend. Overall, the CBOE’s single-session equity put/call volume ratio rebounded to a reading of 0.68 from Thursday’s two-month low. The 10-day moving average followed suit, rising to 0.67.

In equity news, Apple Inc. (NASDAQ:AAPL) was started with a “buy” rating at Nomura on Friday, but Apple Watch forecasts were drawn into question over the weekend. Elsewhere, Facebook Inc (NASDAQ:FB) stock plunged following the company’s latest earnings report, but many analysts saw potential and upgraded their price targets. Finally, call options activity is accelerating on Netflix, Inc. (NASDAQ:NFLX) in the wake of the company’s blowout subscriber growth and earnings report.

Monday’s Vital Data: Apple Inc. (AAPL), Facebook Inc (FB) and Netflix, Inc. (NFLX)

Apple Inc. (AAPL)

AAPL stock dropped nearly 1% on Friday, pulling the stock toward support at the $120 level and its 200-day moving average. Selling pressure was heavy despite Nomura Securities analyst Jeffrey Kvaal initiating AAPL stock with a “buy” rating and a $145 price target. Kvaal believes the iPhone 6 still has some life left and that Apple will increase its market share in 2016.

That said, concerns remain regarding the Apple Watch. In fact, lower shipment levels at Apple Watch chip’s supplier Advanced Semiconductor Engineering Inc. (NYSE:ASE) have prompted some analysts to lower their forecasts for the Apple Watch.

Options volume remained high for AAPL stock on Friday, with just shy of one million contracts changing hands. That said, puts were uncharacteristically popular on the stock, accounting for 57% of Friday’s activity. Furthermore, the total put/call open interest ratio for AAPL has risen lately to a reading of 0.75, arriving in the upper half of the past year’s worth of readings.

Facebook Inc (FB)

It appeared that FB stockholders were not pleased with the company’s recent quarterly report, as Facebook shares plunged on Thursday following the report, then slid another 1.26% on Friday.

However, judging by reaction in the analyst community, this may have been a sell-the-news event. Specifically, FB stock was flooded by a round of price-target increases from the brokerage bunch, including increases from $105 to $120 at Jefferies, from $98 to $105 at Barclays, from $102 to $110 at Goldman Sachs and from $110 to $115 at Raymond James, just to name a few.

Options traders appeared to key in on Facebook’s potential going forward. Some 566,000 contracts traded on Friday, with calls accounting for 66% of the day’s volume. Furthermore, the total put/call open interest ratio for FB stock continues to trend broadly lower, arriving at 0.46 on Friday. In other words, options traders are favoring calls over puts at a rate of more than 2-to-1 for all actionable options currently open on FB.

Netflix, Inc. (NFLX)

Netflix wowed investors with its impressive earnings performance a couple weeks ago — not the least of which was the company’s continued subscriber growth, which once again topped analyst estimates. As a result, NFLX stock tagged a fresh all-time high of $117.88, and options traders have been playing catchup ever since.

On Friday, NFLX made yet another appearance on the most active options listing, with volume swelling to 269,034 contracts. Additionally, calls made up nearly 60% of the day’s take. A closer look reveals that most of Friday’s volume was centered on the expiring weekly July 31 series calls, with profit taking and last minute day-trading dominating the landscape.

Even more impressive, however, is that call buying activity has risen to nearly an annual high. According to data from Schaeffer’s Investment Research, the cumulative ISE, CBOE, and PHLX 50-day call/put volume ratio currently rests at 1.12 — a reading that “ranks in the 97th percentile of its annual range.”

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/2015/08/mondays-vital-data-apple-inc-aapl-facebook-inc-fb-and-netflix-inc-nflx-options/.

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