Wednesday’s Vital Data: Bank of America Corp (BAC), SunEdison Inc (SUNE) and Amazon.com, Inc. (AMZN)

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Wall Street is poised to extend Tuesday’s afternoon rally, as investors pounce on Federal Reserve Chairwoman Janet Yellen’s dovish interest-rate comments. Yellen told the Economic Club of New York yesterday that the Fed would cautiously weigh it’s options on interest rates due to global economic risks.

Looking to add to Tuesday’s gains, U.S. stock futures on the Dow Jones Industrial Average were last seen higher by 0.64%, with futures on the S&P 500 up 0.62% and Nasdaq Composite futures up 0.76%.

Options volume returned to form on Tuesday, with calls gaining traction amid Wall Street’s rate-rally party. Over on the CBOE, the single-session equity put/call volume ratio hit another three-week low of 0.61, while the the 10-day moving average remained stubborn at 0.73.

In equity options news, call option volume soared on Bank of America Corp (NYSE:BAC) yesterday, despite the stock losing ground in the wake of dovish interest rate comments from the Fed. Elsewhere, SunEdison Inc (NYSE:SUNE) option volume surged as the likelihood of a bankruptcy drew nearer, while Amazon.com, Inc. (NASDAQ:AMZN) calls were active following news of two-hour delivery in Berlin, Germany.

Wednesday’s Vital Data: Bank of America Corp (BAC), SunEdison Inc (SUNE) and Amazon.com, Inc. (AMZN)

Bank of America Corp (BAC)

Where the Fed goes, so goes Bank of America. BofA investors were among the few on Wall Street looking forward to four interest-rate hikes from the Fed this year, but those plans have been blown to pieces.

Fed Chair Janet Yellen offered up more dovish commentary on Tuesday, sapping Bank of America’s hopes for higher investment returns for the foreseeable future. The news couldn’t have come at a worse time for BAC stock, as shares were battling resistance in the $14 region following an impressive February rally.

On the options front, traders appeared to indicate hopes of a rebound in BAC stock. Volume soared to more than 850,000 contracts on Tuesday, with calls snapping up a whopping 84% of the day’s take. In the weekly April 1 series, call open interest is concentrated at the $13.50 (29,000 contracts) and $14 (58,000 contracts) strikes – both of which are now out of the money.

On the put side, weekly April accumulations are heaviest at the $13.50 strike, with nearly 17,000 contracts, and the $13 strike, where 11,000 contract reside.  After yesterday’s losses, BAC’s $13.50 strike is hovering just in the money, with short-term support at $13 potentially wavering under pressure.

SunEdison Inc (SUNE)

There has been nothing good to report on Sunedison for some time now.  Rumors of an impending bankruptcy have been swirling for several weeks, with the company missing payments to creditors and delaying its quarterly report.  Yesterday, things got worse when Sunedison yieldco partner TerraForm Global Inc (NASDAQ:GLBL) delayed its annual report and warned that SunEdison could end up filing for bankruptcy.

SUNE stock plummeted more than 55% on the news, and options volume on the stock surged.  More than 362,000 contracts traded on SunEdison on Tuesday, with volume split nearly evenly between puts and calls. With SUNE trading near 55 cents, the $1 and 50-cent strikes have become extremely popular.

In fact, the weekly April 50-cent strike put has seen OI swell to more than 20,000 contracts.

That said, unless you’re looking for an arbitrage play surrounding bankruptcy, or have a considerable appetite for risk, SUNE options should be passed over for better opportunities for now.

Amazon.com Inc. (AMZN)

Watch out, Germany — Amazon.com is looking to roll out a two-hour delivery service in Berlin. The plan reportedly revolves around using existing Berlin courier services, with a fulfillment center to be established on Kurfuerstendamm — a major avenue running through Germany’s capital.

In the wake of the news, Stifel Nicolaus reiterated a buy rating on AMZN and upped its price target from $750 to $775.

AMZN call options rallied on the news, accounting for more than 58% of yesterday’s total volume of 214,000 contracts. AMZN stock is currently perched just below resistance in the $595 region, with $600 within striking distance. Naturally, weekly April 1 call OI is centered on these strikes, with the former sporting OI of 1,825 contracts, while OI at the latter totals 3,578 contracts.

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/2016/03/wednesdays-vital-data-bank-of-america-corp-bac-sunedison-inc-sune-and-amazon-com-inc-amzn/.

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