Market Leaders and Laggards: A Contrarian Perspective on Five Stocks

Strategic Insights -

In the April 18 edition of Schaeffer's Market Leaders and Laggards, several stocks are highlighted for their notable technical and fundamental trends. Among them are Pixar Animation Studios (NASDAQ:PIXR), which is bucking the trend despite market weakness, Avaya (NYSE:AV), which is struggling to maintain support, Google (NASDAQ:GOOG), which is searching for a reason to move higher, IBM (NYSE:IBM), which is laying low after a disappointing earnings report, and Wal-Mart Stores (NYSE:WMT), which is trading near two-year-low territory.

Key Takeaways:

  • Pixar Animation Studios (NASDAQ:PIXR) has a Schaeffer's Equity Scorecard rating of 9.0 out of 10.0, indicating a bullish extreme, despite market weakness.
  • The stock's SOIR of 2.80 ranks above all those taken in the past year, indicating that puts nearly triple calls in the front three months of options.
  • Short interest in PIXR decreased by more than four percent during March, leaving investors with 6.65 days to cover their bearish positions.
  • Wall Street has only two "buys" and six outright "sells" on the stock, making it a contrarian play.
  • Avaya (NYSE:AV) has a Schaeffer's Equity Scorecard rating of 0.0 out of 10.0, indicating a bearish extreme, due to its technical weakness and high short interest.
  • The stock's SOIR of 0.43 ranks in the lower 19th percentile of its annual range, indicating a bearish extreme.
  • Wall Street has 11 "buys" out of 14 total brokerage recommendations for the stock, but short sellers have added more than 10 percent to their holdings during March.
  • Google (NASDAQ:GOOG) has a Schaeffer's Equity Scorecard rating of 3.0 out of 10.0, indicating a mixed message from the short-selling crowd.
  • The stock's SOIR of 0.84 ranks far from a bearish extreme, but options players continue to favor calls over puts.
  • Short interest in GOOG decreased by 28.79 percent during March, but there are still 9.84 million shares sold short, representing more than seven percent of the total float.
  • IBM (NYSE:IBM) has a Schaeffer's Equity Scorecard rating of 3.0 out of 10.0, indicating lingering optimistic sentiment despite a disappointing earnings report.
  • The stock's SOIR of 0.88 ranks above 78 percent of all those taken in the past year, but there is still long-term support in the 75 area.
  • Short sellers decreased their positions by nearly 12 percent during the most recent reporting period, but it would still take less than three days to cover the 11.03 million IBM shares sold short.
  • Wal-Mart Stores (NYSE:WMT) has a Schaeffer's Equity Scorecard rating of 3.0 out of 10.0, indicating a mixed message from the short-selling crowd.
  • The stock's SOIR of 1.16 ranks above all others taken in the past year, indicating that puts outnumber calls in the front three months of options.
  • Short interest in WMT remains at a manageable 2.69 days to cover, despite increasing more than 30 percent during March.

Statistics:

  • PIXR's stock price has increased by 5.14 percent in the past week.
  • The number of put contracts traded on PIXR has increased by 123.09 percent in the past two weeks.
  • The number of call contracts traded on PIXR has increased by 14.50 percent in the past two weeks.
  • The SOIR for PIXR is 2.80, indicating a bullish extreme.
  • Short interest in PIXR decreased by more than four percent during March, leaving investors with 6.65 days to cover their bearish positions.
  • AV's stock price has decreased by 7.83 percent in the past week.
  • The number of put contracts traded on AV has increased by 145.60 percent in the past two weeks.
  • The number of call contracts traded on AV has decreased by 12.50 percent in the past two weeks.
  • The SOIR for AV is 0.43, indicating a bearish extreme.
  • Short interest in AV increased by more than 10 percent during March, but it would still take less than two days to cover the 10.75 million AV shares sold short.
  • GOOG's stock price has increased by 2.14 percent in the past week.
  • The number of put contracts traded on GOOG has decreased by 23.10 percent in the past two weeks.
  • The number of call contracts traded on GOOG has increased by 21.80 percent in the past two weeks.
  • The SOIR for GOOG is 0.84, indicating a mixed message from the short-selling crowd.
  • Short interest in GOOG decreased by 28.79 percent during March, but there are still 9.84 million shares sold short, representing more than seven percent of the total float.
  • IBM's stock price has decreased by 4.45 percent in the past week.
  • The number of put contracts traded on IBM has increased by 54.30 percent in the past two weeks.
  • The number of call contracts traded on IBM has decreased by 23.50 percent in the past two weeks.
  • The SOIR for IBM is 0.88, indicating a bullish extreme.
  • Short sellers decreased their positions by nearly 12 percent during the most recent reporting period, but it would still take less than three days to cover the 11.03 million IBM shares sold short.
  • WMT's stock price has decreased by 5.42 percent in the past week.
  • The number of put contracts traded on WMT has increased by 97.50 percent in the past two weeks.
  • The number of call contracts traded on WMT has decreased by 16.20 percent in the past two weeks.
  • The SOIR for WMT is 1.16, indicating a bearish extreme.
  • Short interest in WMT remains at a manageable 2.69 days to cover, despite increasing more than 30 percent during March.

Sources:

  • Schaeffer's Market Leaders and Laggards, April 18 edition
  • Schaeffer's Option Advisor
  • Schaeffer's Investment Research website
  • Zacks
  • Barron's
  • Forbes