Friday’s Vital Data: Advanced Micro Devices, Inc. (AMD), Amazon.com Inc. (AMZN) and Tesla Inc (TSLA)

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Stock futures are on edge this morning, as Wall Street digests news that U.S. warships bombarded Syrian targets with dozens of Tomahawk cruise missiles. The news ramped up tensions for traders, who were already contending with President Donald Trump’s meeting with Chinese president Xi Jinping and the scheduled monthly U.S. jobs report.

Friday’s Vital Data: Advanced Micro Devices, Inc. (AMD), Amazon.com Inc. (AMZN) and Tesla Inc (TSLA)Against this volatile backdrop, Dow Jones Industrial Average futures are off 0.15%, S&P 500 futures have fallen 0.14% and Nasdaq-100 futures are lower by 0.07%.

On the options front, volume returned to normal on Thursday, with about 12.6 million calls and 11.3 million puts changing hands. On the CBOE, the single-session equity put/call volume ratio rebounded to 0.66, while the 10-day moving average held at a one-month low of 0.61.

Driving Thursday’s options volume, Advanced Micro Devices, Inc. (NASDAQ:AMD) saw heavy activity after Goldman Sachs started AMD stock with a “sell” rating. Elsewhere, Amazon.com, Inc. (NASDAQ:AMZN) calls trickled in after announcing it was hiring 30,000 part-time positions. Finally, Tesla Inc (NASDAQ:TSLA) saw mixed activity after Barclays offered up what it called a “reality check” on TSLA stock.

Friday’s Vital Options Data: Advanced Micro Devices, Inc. (AMD), Amazon.com Inc. (AMZN) and Tesla Inc. (TSLA)

Advanced Micro Devices, Inc. (AMD)

Goldman Sachs initiated coverage on AMD stock yesterday with a “sell” rating, joining a rather small bearish crowd in the brokerage community. According to Goldman, traders have gotten ahead of themselves by pricing in all the good news and leaving all the risks to the downside. AMD stock tumbled more than 6% following Goldman’s initiation, pushing the shares below their 50-day moving average.

Options traders, meanwhile, turned to AMD calls in a rush. Total volume arrived at a near-term high of 674,000 contracts, with calls accounting for 63% of the day’s take.

The bearish note took a toll on AMD sentiment, however, as the April put/call open interest ratio rose to 0.84, indicating that much of yesterday’s call activity may have been the result of rollouts or profit taking on short-term positions. A continuation of this trend after the weak hands have been shaken out could be a bad sign for AMD stock.

Amazon.com, Inc. (AMZN)

Even as many of its brick-and-mortar competitors lay off workers and shutter stores, Amazon is hiring. The company said yesterday that it was bringing on 30,000 new employees, including some 5,000 customer service positions. Amazon part-time workers putting in at least 20 hours a week get benefits, as well as bills that cover tuitions for high-skill fields.

While hiring in the face of waning competition is typically a bullish sign, AMZN stock declined more than 1% yesterday. Additionally, AMZN options traders were just as stoic as ever, with calls only making up 55% of the more than 387,000 contracts changing hands on the issue. Furthermore, short-term traders remain quite wary on AMZN, with the April put/call OI ratio arriving at 1.22.

Now, this preference for puts may be more of a premium issue, as buying AMZN near-the-money calls can be an expensive affair, while selling deep out-of-the-money puts is not only relatively safe, but also profitable given the lofty premiums for AMZN options.

Tesla Inc (TSLA)

With TSLA stock skirting all-time high territory and $300 per share, Barclays felt that traders needed a wakeup call. Using a reference to the post-apocalyptic movie “The Matrix,” Barclays analyst Brian Johnson said that he will be taking the “red pill” when it comes to TSLA, as the stock’s valuation is too high given Tesla’s fundamentals. Johnson reiterated his “underweight” rating and $165 price target.

TSLA options traders were only mildly interested in the bearish note, as calls still made up more than 56% of the 339,000 contracts traded on Tesla yesterday — a relatively typical day for the shares.

Over the short-term, TSLA options traders remain defensive when it comes to taking positions on the shares, as the April put/call OI ratio comes in at 1.09, with puts just edging out calls among options set to expire this month.

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/2017/04/fridays-vital-data-advanced-micro-devices-inc-amd-amazon-com-inc-amzn-tesla-inc-tsla/.

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