Tuesday’s Vital Data: Nvidia Corporation (NVDA), Tesla Inc. (TSLA) and Twitter Inc. (TWTR)

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U.S. stock futures are headed higher this morning, as the major market indices test fresh all-time highs. A continued rebound in energy prices is providing lift, after Russia and Saudi Arabia vowed to extend OPEC’s production cuts for another nine months. As a result, crude futures are trending higher again this morning, rising 57 cents to $49.17 per barrel.

Tuesday’s Vital Data: Nvidia Corporation (NVDA), Tesla Inc. (TSLA) and Twitter Inc. (TWTR)Finally, economic data to watch this morning includes the April report on U.S. housing starts and building permits and the April industrial production and capacity utilization reports.

Heading into the open, futures on the Dow Jones Industrial Average are up 0.15%, S&P 500 futures have added 0.09% and Nasdaq-100 futures have gained 0.12%.

On the options front, volume remained strong on Monday, with about 16.4 million calls and 11.9 million puts changing hands. On the CBOE, the single-session equity put/call volume ratio hit another one-month low of 0.55, while the 10-day moving average ticked lower to its second-consecutive monthly low of 0.63.

Headlining Monday’s options activity, Nvidia Corporation (NASDAQ:NVDA) drew heavy call volume after Goldman Sachs issued a bullish note and boosted its price target on NVDA stock. Meanwhile, Tesla Inc (NASDAQ:TSLA) attracted mixed activity in the wake of Morgan Stanley’s unexpected downgrade of TSLA stock. Finally, Twitter Inc (NYSE:TWTR) was a heavy call favorite after Nielsen reported that it was expanding its coverage of Twitter’s mobile campaigns.

Tuesday’s Vital Options Data: Nvidia Corporation (NVDA), Tesla Inc. (TSLA) and Twitter Inc. (TWTR)Nvidia Corporation (NVDA)

NVDA stock is on fire right now, with the shares gaining a blistering 30% in the past week following an impressive first-quarter earnings report. And the rally has yet to subside, as analysts continue to pile on.

In fact, Goldman Sachs joined the fray yesterday, reiterating its “Buy” rating for NVDA and lifting its price target to $165 from $130. According to Goldman, Nvidia’s datacenter prospects are underappreciated, and the potential for Nvidia’s Volta processor in the artificial intelligence and machine learning markets should surprise many.

NVDA options traders continued to chase the shares on Monday, sending more than 560,000 contracts across the tape. Furthermore, calls snapped up 60% of the day’s take, continuing their recent preference for bullish bets.

But there is still plenty of room left on the bullish bandwagon in the options pits, as the June put/call open interest ratio lingers at 1.19, with puts outnumbering calls among options set to expire within the next month. With NVDA north of $130, the shares are trading well above all but the most bullish of option strikes, and traders should continue to play catch up over the next week.

Tesla Inc. (TSLA)

With TSLA stock up more than 40% so far this year and with the shares hovering near all-time highs, it was only a matter of time before a bit of profit taking bled onto the scene. Morgan Stanley gave traders that outlet yesterday, when the brokerage firm offered up a surprise downgrade to “Equal weight” from “Overweight.” According to Morgan Stanley, Tesla’s dominance in the automated vehicle market is under threat with Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) potentially getting into the game.

The impact wasn’t devastating, but TSLA stock did sink nearly 3% following the downgrade, giving bullish Tesla options trader pause. Volume on the day topped out just north of 340,000 contracts, and calls only eked out 55% of the day’s take. Furthermore, TSLA has seen its June put/call OI ratio rise in the past week from a reading near 1.23 to its current perch at 1.35, as options traders bet on near-term weakness in the shares. That said, most of the June put OI rests well below the $300 strike, and represents either long-standing bearish bets or put selling strategies designed to collect premium.

Twitter Inc (TWTR)

Twitter has gained quite a bullish reputation recently, driven in part by attention from President Donald Trump’s tweets, but also because the company is transforming itself into an online live streaming media portal. Nielsen gave this move more credence yesterday when it announced it was expanding its coverage of Twitter’s mobile campaigns by 23 new markets across the globe.

What’s more, Twitter live streamed its first WNBA game this weekend, attracting 1.1 million unique viewers and an average minute audience of 62,459 — roughly a third of the audience for the NFL’s live streamed Thursday Night Football games.

Twitter options traders were surprisingly bullish on the shares Monday. Volume rose to over 266,000 contracts, with calls gobbling up 84% of the day’s take. The recent rally in TWTR stock has driven many bulls toward the shares in recent weeks, with the June put/call OI ratio plunging to 0.43, leaving calls to more than double puts among near-term options.

With TWTR now trading near resistance in the $19-$20 region, it will be interesting to see if this bullish stance, and Twitter’s rally can hold.

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/2017/05/tuesday-vital-data-nvidia-corporation-nvda-tesla-inc-tsla-twitter-inc-twtr/.

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