Friday’s Vital Data: Apple Inc. (AAPL), Pandora Media Inc (P) and Oracle Corporation (ORCL)

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U.S. stock futures are pointed broadly lower this morning, as stocks look to extend Thursday’s losses. The post-Fed rally was cut short yesterday, with energy sector stocks hammered on a sharp reversal from oil prices. With December option expiration looming today, more volatility could be in the mix heading into a holiday-shortened week. At last check, U.S. stock futures on the Dow Jones Industrial Average were lower by 0.54%, with S&P 500 futures down 0.47% and Nasdaq Composite futures of 0.27%.

Options activity retreated a bit on Thursday, with puts beginning to gain favor ahead of December expiration this afternoon. On the CBOE, the single-session equity put/call volume ratio rebounded to 0.77, while the 10-day moving average continued lower to 0.72.

In equity options activity, call activity on Apple Inc. (NASDAQ:AAPL) took another hit on Thursday after RBC Capital joined the chorus of analysts expressing concern over iPhone sales estimates. Meanwhile, Pandora Media Inc (NYSE:P) drew unusually high call volume following updated royalty rules for streaming music. Finally, Oracle Corporation (NASDAQ:ORCL) puts were popular in the wake of a poorly received second-quarter earnings report.

Friday’s Vital Data: Apple Inc. (AAPL), Pandora Media Inc (P) and Oracle Corporation (ORCL)

Apple Inc. (AAPL)

For the third time in less than two weeks, a brokerage firm has weighed in on the potential for weak first-quarter Apple iPhone sales. RBC Capital was the latest to express concern, cutting its March revenue forecast from $61 billion to $55.7 billion and its earnings outlook to $2.37 per share from $2.59. The RBC note follows similar statements from JPMorgan last Friday and Barclays on Monday.

AAPL option volume has remained steady during the past couple of weeks, with Thursday’s volume coming in at roughly 1.3 million contracts. However, the percentage of calls making up that volume has steadily decreased from north of 63% to 57% on Thursday. Look for options traders to grow increasingly cautious should this narrative gain additional traction.

December option expiration takes place at the end of trading this afternoon, and there are a few strikes that AAPL traders should keep a close watch on. On the upside, there are 28,011 call contracts at the December $110 strike, which could create headwinds should AAPL attempt to move higher this afternoon.

On the downside, some 41,920 $110 puts are currently in the money by about a point-and-a-half. Should AAPL stray too far from $110, there is also the potential for support near $105, with 25,891 put contracts open at that strike.

Pandora Media Inc (P)

Pandora Media caught a favorable break this week, after the U.S. Government’s Copyright Royalty Board set rates for paying artists for online streaming. Going forward, Pandora will pay out 17 cents per 100 plays, up slightly from the former rate of 14 cents per 100 plays. The new rates are a win for Pandora, as copyright holders were pushing for a 79% increase in streaming fees.

P stock bulls were out in force on Thursday, sending the stock more than 13% higher and flooding the shares with call options. Overall, P saw record short-term volume of 377,916 contracts change hands yesterday, with calls accounting for 77% of the take.

Heading into December expiration, P stock is trading comfortably north of peak call OI of 20,058 contracts at the $14 strike, but is still facing some 16,847 calls at $16. Peak put OI, meanwhile, is well out of the money, with 18,459 puts currently open at the $10 strike.

Oracle Corporation (ORCL)

ORCL stock was smacked for a 5% loss on Thursday after Oracle stockholders expressed their displeasure with the company’s second-quarter earnings report. Earnings came in at 63 cents per share, three cents better than the consensus, but revenue missed expectations, arriving at $9 billion versus the $9.03 billion analysts were anticipating. Guidance also come up short of expectations.

Option volume was well above average for ORCL stock, with 254,492 contracts changing hands on Thursday. Puts were the popular choice, accounting for 66% of the day’s take. As for December expiration, ORCL is trading well below most major put or call OI following yesterday’s plunge. The $36 strike is the stock’s last bastion for support today, with only 13,151 put contracts and technical support in the region preventing ORCL from testing 52-week low territory.

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/2015/12/fridays-vital-data-apple-inc-aapl-pandora-media-inc-p-and-oracle-corporation-orcl/.

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