Wednesday’s Vital Data: Bank of America Corp (BAC), Twitter Inc (TWTR) and Netflix, Inc. (NFLX)

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U.S. stock futures are headed lower this morning, as Wall Street weighs its options against continued selling pressure out of China. Investors are also nervous ahead of a wave of economic data this morning, with ADP employment, the March trade deficit, first-quarter productivity, April ISM services and March factory orders all on tap.

Wednesday’s Vital Data: Bank of America Corp (BAC), Twitter Inc (TWTR) and Netflix, Inc. (NFLX)Heading into the maelstrom, futures on the Dow Jones Industrial Average are down 0.49%, with S&P 500 futures down 0.58% and Nasdaq-100 futures lower by 0.67%.

Options volume was brisk and put heavy on Tuesday, with ETFs taking the lead once again amid growing concerns that stocks are top heavy. The CBOE single-session equity put/call volume ratio rebounded from Monday’s dip, rising to 0.77 and pushing the 10-day moving average to a one-month high of 0.71.

Technical traders took to the options pits this week, as Bank of America Corp (NYSE:BAC) saw call volume rise even as the shares retreated from overhead resistance near $14. Additionally, Twitter Inc (NYSE:TWTR) also saw a rise in call volume as the shares dipped to a new all-time low. Finally, Netflix, Inc. (NASDAQ:NFLX) put options gained popularity after the stock was rejected at its 10-day moving average.

Wednesday’s Vital Options Data: Bank of America Corp (BAC), Twitter Inc (TWTR), and Netflix, Inc. (NFLX)

Bank of America Corp (BAC)

Driven by a well-received quarterly earnings report, BAC stock appeared ready to break out above resistance in the $15 region last week. But, as it turns out, Wall Street just wasn’t that into BAC stock — especially with the Federal Reserve delaying key interest-rate hikes that could boost Bank of America’s investment operations. The shares have beat a steady retreat from $15, breaking below $14.50 and threatening support near $14 in the process.

Options traders appeared somewhat hopeful on Tuesday that BAC’s decline would halt sooner rather than later. Total volume came in at 605,000 contracts, with calls snapping up 65% of the day’s take. However, options support is thin below the stock in the weekly May 6 series, with BAC breaking below peak put OI of more than 26,000 contracts at the $14.50 strike yesterday.

With some 28,800 calls also in residence at the May 6 series $14.50 strike, it seems unlikely that BAC will reclaim this hurdle before Friday’s close — barring any broad-market moving news. What’s more, BAC’s intermediate-term outlook isn’t looking too pretty either.

Twitter Inc (TWTR)

TWTR stock has fallen far from its post-IPO peak near $75. Yesterday, the shares tagged a new record low of $13.90, and with TWTR trading lower in premarket action, that record may be broken once again today. The shares are still reeling from a dismal first-quarter earnings report, with investors hoping that video will help resurrect fallen TWTR stock.

Options traders are also searching for a rebound catalyst. TWTR stock saw nearly 177,000 contracts trade on Tuesday, with calls snapping up roughly 55% of the day’s take. Heading into the middle of the week, TWTR is trading below all major May 6 series put and call OI strikes, save the $13.50 strike, where 11,633 puts currently reside. Given TWTR’s rapid decay this week, put sellers at this strike may have cause for concern.

Netflix, Inc. (NFLX)

InvestorPlace Market Strategist Anthony Mirhaydari recently listed NFLX as one of 10 stocks that you should “sell in May and go away,” and he appears to be onto something. NFLX has been beaten lower during the past several weeks, as investors pan Netflix’s quarterly earnings report — which included ramped-up content spending and slowing subscriber growth.

The shares recently tested support near $90, but the rebound met a wall near $91 in the form of NFLX’s 10-day moving average. This trendline completed a death-cross of its 50-day counterpart one week ago today, signaling more potential losses on the intermediate-term horizon.

Options traders are slowing coming around to the idea of an extended decline for NFLX. Yesterday, puts accounted for 51% of Netflix’s total option volume of 171,000 contracts. What’s more, looking out to monthly May 20 series OI, put traders have amassed roughly 11,000 contracts at both the $90 and $80 strikes. Peak call OI for the series, however, totals a mere 9,700 contracts at the deep out-of-the-money $100 strike.

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/2016/05/wednesdays-vital-data-bank-america-corp-bac-twitter-inc-twtr-netflix-inc-nflx/.

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