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Thursday’s Vital Data: Nordstrom, Roku and

Options activity provides a look at expectations on JWN, ROKU and CRM

U.S. stock futures are pointing toward a slightly higher open as traders look to continue yesterday’s rally.

Thursday's Vital Data: Nordstrom, Roku and Salesforce.comAhead of the bell, futures on the Dow Jones Industrial Average are up 0.24%, and S&P 500 futures are higher by 0.22%. Nasdaq-100 futures have added 0.19%.

In the options pits, yesterday’s contest ended in a tie between calls and puts. Overall volume settled slightly below average levels and reflected the market returning to normal after the hyperactivity earlier this month. Approximately 14.8 million calls and 14.9 million puts changed hands on the session.

With panic subsiding, we continue to see gravity take hold of the CBOE single-session equity put/call volume ratio. It fell to 0.6, or the lower half of its 2019 range. Meanwhile, the 10-day moving average fell to 0.71.

Options activity was a mixed bag on Wednesday, but calls led the way in the three stocks highlighted below.  Nordstrom (NYSE:JWN) saw better-than-expected earnings and is gapping 9% higher this morning. Roku (NASDAQ:ROKU) rallied to a new closing high amid continued momentum on the heels of this month’s rousing earnings release. Finally, (NYSE:CRM) saw heavy options trading ahead of tonight’s quarterly report.

Let’s take a closer look:

Nordstrom (JWN)

The earnings beats for retail companies rolled on last night, this time with Nordstrom stepping up to the plate. With JWN stock down 43% year-to-date, shareholders were desperate for something — anything — that could return positivity to an otherwise dismal trend.

Well, ask, and ye shall receive.

Nordstrom’s posted earnings per share of 90 cents on revenue of $3.87 billion. Analysts were expecting earnings of 76 cents on sales of $3.93 billion, according to Consensus Metrix. Traders ignored the top-line miss and rewarded the stock for the bottom-line beat. JWN stock is currently trading up over 9% premarket.

Here’s the bad news. For all its fury, this morning’s pole vault still isn’t enough to reverse the stock’s steep downtrend. With all major moving averages pointing lower and resistance heaped overhead, it’s going to take more than a single pop to turn the technicals. Wait and see if JWN stock can take out the 50-day moving average at $30.44 before letting your bullishness bubble up.

On the options trading front, JWN was the king of the hill yesterday attracting move buzz than anyone. Total activity rocketed to 772% of the average daily volume, with 102,900 contracts traded. Calls won the popularity contest accounting for 53% of the day’s take.

Implied volatility was sky-high ahead of the report, sitting at the 100th percentile of its one-year range. The market was pricing in a move of $3.30 or 12.4%, so this morning’s 9% jump was well inside of expectations.

Roku (ROKU)

Ever since taking the momentum world by storm with its profit-giving volatility and rocket ship trajectory, Roku shares have made multiple appearances atop the most-active options leaderboard. Yesterday saw the provider of online media players rally 3.2% to a record close of $138.58.

With the ramp, ROKU stock’s year-to-date gains have now risen to a sizzling 352%. The stock is slightly extended, sure, but with this month’s mighty gap following strong earnings growth, I suspect pullbacks will be shallow moving forward. A drop toward the rising 20-day moving average would likely prove a strong buying opportunity like all its predecessors.

On the options trading front, calls slightly outpaced puts on the session. Activity only climbed to 97% of the average daily volume, with 93,891 total contracts traded. But it was still one of the most active stocks of the day. Calls added 55% to the session’s sum.

Implied volatility continued its post-earnings crush, falling to 53%. That pushes it to the 12th percentile of its one-year range. Premiums are pricing in daily moves of $4.60 or 3.3%. (CRM) reports earnings tonight and options traders are already jockeying for positions ahead of the event. Yesterday saw CRM stock rally for its fifth day in a row, regaining much of the ground lost earlier this month.

Unfortunately, the technical posture of CRM’s trend remains broken with significant potential resistance at $150. The 20-day and 50-day moving averages are both pointing lower. The best-case scenario will be a big up gap tomorrow pushing CRM stock north of $155 to clear the near-term ceilings looming overhead.

On the options trading front, traders came after calls with a vengeance. Activity swelled to 190% of the average daily volume, with 77,221 total contracts traded. 69% of the trading came from call options alone.

Implied volatility is hovering at 36%, which is also the 36th percentile of its one-year range. The options board is looking for a jump of $7.04, or 4.8%, after tonight’s announcement.

As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.

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