Thursday’s Vital Data: Apple Inc. (AAPL), Facebook Inc (FB) and Alibaba Group Holding Ltd (BABA)

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Wall Street is bouncing back in premarket trading, as $1 billion in profit at Facebook Inc (NASDAQ:FB) and rising oil prices are helping stocks shake off yesterday’s 1.5% across-the-board plunge. The situation could change quickly, however, as weekly jobless claims, durable goods orders, and pending home sales data are all on tap later this morning.

Heading into the open, U.S. stock futures on the Nasdaq Composite were up 0.47%, with S&P 500 futures up 0.12%, and Dow Jones Industrial Average futures bouncing around flat to lower.

In options activity, volume surged to record short-term levels on Wednesday, as traders rushed to amend positions on Apple Inc. (NASDAQ:AAPL) following the company’s disappointing quarterly earnings results. On the CBOE, the single-session equity put/call volume ratio rose to 0.71, while the 10-day moving average extended its week-long decline to arrive at 0.75.

In equity option news, Apple’s first-quarter earnings and revenue topped Wall Street’s expectations, but the company’s second-quarter guidance came up well short of the mark. Elsewhere, Facebook absolutely destroyed the consensus estimate, postings its first quarterly profit of $1 billion. Finally, Alibaba Group Holding Ltd (NYSE:BABA) also topped earnings expectations, prompting a premarket rally from the depressed shares.

Thursday’s Vital Data: Apple Inc. (AAPL), Facebook Inc (FB) and Alibaba Group Holding Ltd (BABA)

Apple Inc. (AAPL)

The much-anticipated quarterly report from Apple arrived yesterday morning, and it failed to live up to expectations. For the first quarter, earnings rose to $3.28 per share on revenue of $75.87 billion, versus Wall Street’s targets of $3.23 per share and revenue of $76.59 billion. However, Apple placed second-quarter revenue guidance at between $50 billion and $53 billion, well short of analyst expectations for $55.64 billion.

The poor guidance underscored many of the growth concerns analysts had heading into the report, and traders expressed their concern by sending the stock lower by more than 6.5%. Options traders were also less than enthusiastic, with calls only snapping up 59% of yesterday’s record 3.35 million contracts in total volume.

AAPL is now trading well south of peak weekly Jan 29 series put open interest at the $95 strike, with some 20,630 contracts at this soon-to-expire strike. That said, AAPL has reclaimed $94 in premarket trading, meaning that roughly 12,500 puts at the January $94 strike could provide some ballast.

Facebook Inc (FB)

After the close last night, Facebook blew Wall Street’s fourth-quarter earnings expectations out of the water. For the quarter, FB said it earned roughly $1.5 billion, or 79 cents per share, compared to consensus targets of 68 cents per share. Revenue soared 44% to $5.84 billion, easily topping the consensus target for $5.37 billion.

In premarket trading, FB stock has surged nearly 15%, placing the shares above $108 at last check. Options traders appeared ready for the rally, with calls accounting for 60% of yesterday’s brisk total volume of roughly one million contracts.

An open above $108 would put FB stock north of all major call strikes for the weekly January series, save the $110 strike, which sports OI of 11,719 contracts. The $110 region has long been a thorn in FB’s side, and, barring a major market rally to provide additional price support for a breakout, FB could be capped here through expiration on Friday.

Alibaba Group Holding Ltd (BABA)

Alibaba caught traders by surprise this morning, after it topped Wall Street’s third-quarter earnings estimates. Alibaba said it earned 99 cents per share, blowing past the consensus estimate for 91 cents per share and the whisper number of 93 cents per share. Revenue rose 32% to $5.33 billion, versus expectations for $5.11 billion.

Options traders were solidly bullish ahead of the report. Overall volume came in at a near-term high of more than 317,000 contracts, with calls snapping up 72% of the take.

In premarket action, BABA is up roughly 4% at $72.30, placing the stock north of nearly 5,700 calls at the $72 strike. However, there are still nearly 11,000 calls open at the Jan $75 strike, which could create headwinds heading into Friday’s expiration.

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/2016/01/thursdays-vital-data-apple-inc-aapl-facebook-inc-fb-and-alibaba-group-holding-ltd-baba-options/.

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