Wednesday’s Vital Data: Facebook Inc (FB), Twitter Inc (TWTR) and Alibaba Group Holding Ltd (BABA)

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U.S. stock futures are headed higher this morning. After two sessions of heavy losses, the major market indices are finally bouncing back. Market sentiment appears positive ahead of a monetary policy statement from the Federal Reserve. There is no rate hike expected from the Fed, but today’s statement will be Janet Yellen’s last as Fed Chair.

Wednesday’s Vital Data: Facebook Inc (FB), Twitter Inc (TWTR) and Alibaba Group Holding Ltd (BABA)Also in the works today are ADP’s January private-sector employment report, fourth-quarter employment costs, Chicago business conditions and December pending home sales.

Against this backdrop, Dow Jones Industrial Average futures are up 0.86%, S&P 500 futures have added 0.42% and Nasdaq-100 futures have gained 0.46%.

Turning to the options pits, traders were cautious on Tuesday. About 20.8 million calls and 19.4 million puts changed hands on the session. The CBOE single-session equity put/call volume ratio extended its recent bounce to 0.61 — a one month high. The 10-day moving average also ticked higher to 0.54.

Taking a closer look at Tuesday’s options activity, Facebook Inc (NASDAQ:FB) and Alibaba Group Holding Ltd (NYSE:BABA) each saw an influx of call volume ahead of their respective earnings reports. Meanwhile, Twitter Inc (NYSE:TWTR) received a bullish sentiment boost from Citron Research.

Wednesday’s Vital Options Data: Facebook Inc (FB), Twitter Inc (TWTR) and Alibaba Group Holding Ltd (BABA)

Facebook Inc (FB)

Facebook stock was among the few equities to rally yesterday, despite the heavy selling mood on Wall Street. FB shares rebounded off technical support from their 50-day moving average. More than that, Facebook bulls are gearing up for tonight’s quarterly earnings report.

After the close, Facebook is expected to post a profit of $1.95 per share, up from $1.41 per share in the year ago period. Revenue is expected to rise 42.5% to $12.55 billion. The whisper number comes in at $2.05 per share, well above the consensus.

Options traders are optimistic ahead of the report. Volume on Tuesday rose to over 212,000 contracts, with calls making up 64% of the day’s take. Furthermore, the Feb. 2 put/call open interest ratio rests at 0.53, with calls nearly doubling puts for the series.

Finally, implieds are pricing in a post earnings move of about 5.9% for Facebook stock. This places the upper bound at $198.50 and the lower bound at $176.50.

Twitter Inc (TWTR)

Sentiment is making a comeback on Twitter. The company received a boost from Citron Research recently, which expects TWTR stock to rally some 45% to $35 in the next 12 months. Additionally, rumors are spreading that both Salesforce.com (NYSE:CRM) and Tencent Holdings (OTCMKTS:TCEHY) might be interested in acquiring Twitter.

Options traders love speculation, so it’s no surprise that volume ramped up on Tuesday. More than 207,000 contracts traded on Twitter stock, with calls making up 79% of total volume. There is some room for improvement in TWTR’s sentiment backdrop, though. At last check, the February put/call OI ratio arrived at 0.60, just above the midpoint of this reading’s annual range for Twitter.

Alibaba Group Holding Ltd (BABA)

Caution has ramped up considerably on Alibaba stock in the past week. The Chinese e-commerce giant will report earnings tomorrow morning. Analysts are expecting a profit of $1.67 per share on revenue of $12.61 billion. The whisper number comes in at $1.74 per share.

Judging by activity in the past week, options traders are either increasing bearish bets or liquidating call positions. Volume on Tuesday rose to 197,000 contracts, with calls snapping up 68% of the day’s take.

In the process, the Feb. 2 put/call OI ratio has soared from last Monday’s reading of 0.32 to today’s perch at 0.43.

As of this writing, Joseph Hargett was long on Advanced Micro Devices, Inc. (AMD) stock.


Article printed from InvestorPlace Media, https://investorplace.com/2018/01/wednesdays-vital-data-facebook-inc-fb-twitter-inc-twtr-and-alibaba-group-holding-ltd-baba/.

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