Tuesday’s Vital Data: Apple Inc. (AAPL), Bank of America Corp (BAC) and Tesla Motors Inc (TSLA)

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U.S. stock futures are mixed this morning, as Wall Street remains relatively barren. While the markets are open for business, many traders will remain on holiday break through the start of next year. The 20,000 mark for the Dow Jones Industrial Average remains a dream for many bulls, however, and the blue-chip barometer has a slim chance of topping that hurdle due to light volume this week.

At last check, futures on the Dow were up 0.02%, with S&P 500 futures up 0.12%. Nasdaq-100 futures were also up by 0.14%.

On the options front, volume was well below average on Dec. 23 — the last trading session ahead of the Christmas break. Only about 8.2 million calls and 7.9 million puts changed hands on the session. On the CBOE, the single-session equity put/call volume ratio dipped to 0.63, while the 10-day moving average ticked higher to 0.63.

Turning to Friday’s volume leaders, Apple Inc. (NASDAQ:AAPL) saw an unusual level of put volume on Friday after Consumer Reports snubbed the new MacBook Pro. Elsewhere, Bank of America Corp (NYSE:BAC) unloaded the last of its international credit card business to Lloyds Banking Group PLC (ADR) (NYSE:LYG) and Tesla Motors Inc (NASDAQ:TSLA) was upgraded at Vetr.

Tuesday’s Vital Data: Apple Inc. (AAPL), Bank of America Corp (BAC) and Tesla Motors Inc (TSLA)

Apple Inc. (AAPL)

AAPL stock may be in for a spot of short-term weakness, if the worsening sentiment in the options pits is any indication. On Friday, AAPL saw more than 603,000 contracts cross the tape — a considerable accomplishment given the overall low volume on the day. What’s disturbing is that puts claimed the majority of the day’s activity with 51% of the take.

With any other stock, this wouldn’t be much of an issue, but with AAPL, which typically sees calls account for 63% to 64% of daily volume, it was a considerable sentiment blow. Additionally, there was news driving the added put volume, as Consumer Reports tested the new MacBook Pro and failed to give the laptop a “recommended” buy rating — the first time any Apple MacBook has failed to grab the coveted rating.

With AAPL stock trading just below resistance at $116, and sentiment sliding, we could see considerable selling pressure on the shares once the rest of Wall Street returns to work next week.

Bank of America Corp (BAC)

BAC continues to ride high among both stock and options traders.  The shares saw option volume rise to 375,000 contracts on Friday, with calls making up 66% of the day’s activity. What’s more, according to Trade-Alert.com, BAC’s weekly December 30 strike 24 calls attracted significant call buying activity, with a block of 5,000 contracts crossing at the strike for the ask price of a penny, or $1.00 per contract.

The play seems highly speculative — especially given the holiday shortened trading week — but there are several drivers that could help vault BAC to fresh highs.

For instance, Bank of America announced that it is unloading the last of its international credit card interest to Lloyds Banking Group for $2.35 billion. The sale marks the end of BofA’s activity in the international credit card market, and the company can now focus its efforts on its core businesses. Speaking of which, Bank of America’s investing unit is looking at three potential rate hikes from the Federal Reserve in 2017.

Tesla Motors Inc (TSLA)

TSLA stock received a double bump last week — one sentiment and one technical. On the sentiment front, Vetr upgraded TSLA stock to “hold” from “sell.” While the move drew little fanfare, it was enough to spark technical buying as the shares topped resistance at $210. Tesla is now pinned against its 200-day moving average — a trendline the shares last closed a session above in August.

A breakout here could be quite bullish for the shares, and TSLA options traders appear to be banking on the move. On Friday, Tesla saw volume of more than 203,000 contracts, with calls snapping up 53% of the day’s take, which, given traders’ recent preference for TSLA puts, is a significant shift in sentiment for the shares.

Looking out to January 2017 options, peak call open interest lies at $230, totaling roughly 10,680 contracts. The next closest significant call accumulation numbers 5,800 contracts at $220. In other words, there is little in the way of overhead options-related resistance to slow TSLA down should the shares finally reclaim their 200-day trendline.

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/2016/12/tuesdays-vital-data-apple-inc-aapl-bank-of-america-corp-bac-and-tesla-motors-inc-tsla/.

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