Wednesday’s Vital Data: Walt Disney Co (DIS), Facebook Inc (FB) and Yelp Inc (YELP)

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U.S. stock futures are trading flat to higher this morning, as Wall Street digests the latest round of corporate earnings and a dip in crude oil prices.

Wednesday’s Vital Data: Walt Disney Co (DIS), Facebook Inc (FB) and Yelp Inc (YELP)Walt Disney Co (NYSE:DIS) is among those watched, as the Mouse’s House is down despite reporting better-than-expected earnings and revenue. Crude, meanwhile, is off 0.49% at $42.49 ahead of a weekly report on U.S. oil supplies.

Heading into the open, futures on the Dow Jones Industrial Average are up 0.05%, S&P 500 futures have risen 0.11% and Nasdaq-100 futures have gained 0.02%.

Options activity appears to have entered the same holding pattern as the broader stock market, with volume falling sharply across the board. Yesterday, only about 11.8 million calls and 9.7 million puts crossed the tape, below the prior three-week’s average. Over the on the CBOE, the single-session equity put/call volume ratio rose to 0.61, while the 10-day moving average fell to two-week low of 0.63.

Driving yesterday’s equity options activity, Walt Disney saw a jump in call option activity ahead of last night’s quarterly earnings report, though bulls may be disappointed in DIS stock’s premarket decline. Elsewhere, Facebook Inc (NASDAQ:FB) announced it will be forcing ads on users of ad-blocking software and was upgraded at Vetr. Finally, Yelp Inc (NASDAQ:YELP) posted a surprise quarterly profit, its first since 2014.

Wednesday’s Vital Data: Walt Disney Co (DIS), Facebook Inc (FB) and Yelp Inc (YELP)

Walt Disney Co (DIS)

Driven by strength in its film unit, Walt Disney said it earned $1.62 per share in the most recent quarter, as revenue rose 9% to $14.28 billion — topping Wall Street’s estimates for earnings of $1.61 per share on revenue of $14.15 billion. Disney also said it was investing $1 billion in streaming services firm BAMTech, a company created by Major League Baseball.

The BAMTech deal is part of a larger move to create a standalone service for ESPN streaming — though the service won’t include current ESPN programming.

Options traders appeared ready for a DIS stock rally following earnings, as calls made up 59% of the 461,000 contracts traded on the equity. However, Walt Disney stock is struggling with resistance in the $96 region, which is home to the shares’ 10-day moving average and nearly 4,000 open call contracts in the August 19 series. Support should emerge near $95, but a breach of this area would put DIS below all major put support strikes for the next month, potentially setting up a longer decline for the shares.

Facebook Inc (FB)

News broke yesterday that Facebook would start forcing ads on people using ad-blocking software. Some analysts believe the move will result in a spike in ad revenue for Facebook, and while a brief bump may occur, it should only last until users find another solution to get around Facebook’s efforts.

Separately, Vetr upgraded FB stock to “buy” from “hold” yesterday. Vetr has a price target of $130.44.

Options traders continued to load up on FB stock call options on Tuesday. Total volume dipped slightly to just shy of 400,000 contracts, with calls accounting for 59% of the day’s take. After being rejected near $128 at the end of July, FB stock has entered a holding pattern near $125, with its 10-day moving average playing catch-up. As a result, the $125 strike has quickly become the most popular among short-term call traders, with more than 10,000 contracts in the weekly August 12 series and roughly 20,000 in the August 19 series.

Yelp Inc (YELP)

Yelp is not dead yet, and the stock doesn’t want to go on the cart. After the close last night, Yelp posted a profit of a penny per share on revenue of $173.4 million, besting the consensus estimate for a loss of seven cents per share and sales of $170 million. The quarter marked the first positive earnings for Yelp since 2014, and shareholders are celebrating, sending YELP stock more than 12% higher in premarket trading.

Options traders were ready for the move, as calls snapped up 70% of the more than 178,000 contracts traded on YELP yesterday. The shares are poised to open near $37, putting YELP above all major short-term call and put OI, save for about 5,600 calls at the $38 strike in the August 19 series.

Follow-through buying today could test this hurdle, leaving the $40 strike and YELP’s 200-day moving average as the next potential barriers to an extended rally.

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/2016/08/wednesdays-vital-data-walt-disney-co-dis-facebook-inc-fb-yelp-inc-yelp/.

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