Friday’s Vital Data: Nvidia Corporation (NVDA), Facebook Inc (FB) and United States Steel Corporation (X)

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U.S. stock futures are trading broadly lower this morning as Wall Street grows uneasy about the recent string of all-time highs from the major market indices. Yesterday, the Dow Jones Industrial Average hit its 10th straight record closing high, and traders this morning appear to be taking profits following the impressive run. On the economic front, new-home sales for January and consumer sentiment for February will both hit the Street this morning.

Friday’s Vital Data: Nvidia Corporation (NVDA), Facebook Inc (FB) and United States Steel Corporation (X)Against this nervous backdrop, futures on the Dow have dropped 0.45%, with S&P 500 futures down 0.5% and Nasdaq-100 futures falling 0.6%.

On the options front, volume rebounded somewhat on Thursday, though the roughly 15.4 million calls and 14.4 million puts traded were still below average. Turning to the CBOE, the single-session equity put/call volume ratio rose slightly to 0.62, while the 10-day moving average halted its recent decline at 0.60.

Turning to Thursday’s volume leaders, Nvidia Corporation (NASDAQ:NVDA) saw mixed options activity after NVDA stock was smacked with a trio of downgrades. Meanwhile, Facebook Inc (NASDAQ:FB) call options were hot yesterday following reports that the company was pursuing an MLB streaming deal. Finally, United States Steel Corporation (NYSE:X) nosedived on news that President Donald Trump could delay his infrastructure spending plans until 2018.

Friday’s Vital Options Data: Nvidia Corporation (NVDA), Facebook Inc (FB) and United States Steel Corporation (X)

Nvidia Corporation (NVDA)

With analysts getting nervous about record highs across the board on Wall Street, downgrades were bound to arrive sooner or later. NVDA stock, one of the best performing tech stocks of 2016, emerged as the whipping boy, with Instinet, BMO Capital and Nomura all downgrading the shares due to valuation concerns.

Nomura and Instinet both set a price target of $90, while BMO went further and set a target of $85. All three noted that while growth potential in the automotive and data center markets remained strong, it didn’t justify Nvidia’s current valuation.

NVDA stock fell nearly 9.3% as a result, and the shares are off another 4% in premarket trading this morning.

Options traders appeared shaken by the news, with calls dropping to only 55% of the more than 729,000 contracts traded on NVDA stock yesterday — a near-term low for daily call activity for the shares. NVDA is now trading well below all major March call open interest accumulations, and has even breached peak March put OI of 10,000-plus contracts at $100. The $95 strike is the next potential area of options-related support, with 7,700 puts in residence at this strike.

Facebook Inc (FB)

What Twitter Inc (NYSE:TWTR) did with the NFL, Facebook is looking to do with Major League Baseball. The social media giant is exploring a deal to stream one MLB game a week on its website as part of a push to expand its video offerings. Facebook has experience streaming live events after streaming Mexican soccer games in English via a previous deal with Univision.

Options traders were quick to speculate on the deal, sending 397,000 contracts across the tape on Thursday. What’s more, calls made up 69% of the day’s take. The short-term options outlook for FB stock continues to lean bullish, as the March put/call OI ratio rests at 0.78. Peak call OI for the series numbers more than 56,000 contracts at the $135 strike, which will trade out-of-the-money this morning if pre-market losses carry over into the open.

United States Steel Corporation (X)

U.S. Steel stock has surged more than 80% since the election on promises of $1 trillion in infrastructure spending from President Donald Trump. However, a report released yesterday indicated that Trump may delay his infrastructure plan until 2018, giving many investors in infrastructure reason to worry. As a result, X stock plunged more than 7.8% on Thursday and the shares are off another 2% in premarket action this morning.

Options activity was nearly divided on the shares, with calls eking out 54% of the 316,000 contracts traded yesterday. It will take more than one day of mixed activity to shake X options traders, however, as the short-term outlook remains heavily bullish. Specifically, the March put/call OI ratio rests at 0.62, with calls on the verge of doubling puts among options set to expire within the next month.

Peak call OI of 9,700 at the March $40 strike appears a bit out of reach at the moment, but the extended decline has made the March $35 and $36 strikes attractive to those looking for a rebound.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/02/friday-vital-data-nvidia-corporation-nvda-facebook-inc-fb-united-states-steel-corporation-x/.

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