U.S. Markets close in 3 hrs 31 mins

Monday’s Vital Data: Applied Materials, Alibaba and Nvidia

Tyler Craig

U.S. stock futures are adding to Friday’s sharp rebound. The recovery is likely being aided by the action in the bond market. Bond prices are weakening, and yields are starting to snap-back from their record low levels.

Monday's Vital Data: Applied Materials, Alibaba and Nvidia

Source: Shutterstock

Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.1.09% and S&P 500 futures are higher by 1.06%. Nasdaq-100 futures have added 1.33%.

In the options pits, call volume led the way ahead of the weekend while overall volume racked up to above-average levels. Approximately 21.2 million calls and 19.2 million puts changed hands on the session.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

With buyers returning to the field, the CBOE single-session equity put/call volume ratio plunged back down to 0.67. Friday’s market recovery and this morning’s strong follow-through proves once again that spikes seen in this metric like last week are reliable signals that fear is overdone and a bottom is nigh. The 10-day moving average dropped to 0.76.

Options activity was hopping in companies reporting quarterly reports. Applied Materials (NASDAQ:AMAT), Alibaba (NYSE:BABA) and Nvidia (NYSE:NVDA) all saw heavy volumes amid volatile trading sessions.

Let’s take a closer look:

options trading

Applied Materials (AMAT)

Applied Materials shares saw a sharp uptick in volatility Friday after the release of third-quarter earnings. Early morning weakness took AMAT stock down as much as 5.4% before buyers emerged and pushed it back to finish down 1.1%.

The semiconductor company posted earnings per share of 74 cents on sales of $3.56 billion. Although both metrics marked a double-digit, year-over-year decline (29% and 14%, respectively), they still beat the Street’s estimates.

AMAT bulls should be pleased with Friday’s price performance for two reasons. First, the stock rallied back to close above the 50-day moving average, which kept its intermediate uptrend intact. Second, it also closed above its prior pivot low after trading below it throughout the morning. Both successes suggest buyers aren’t ready to relinquish control, and the path of least resistance remains higher.

On the options trading front, puts outpaced calls by over two to one. Total activity swelled to 299% of the average daily volume, with 92,107 contracts traded; 67% of the trading came from put options alone.

Premiums were baking in a gap of $2.54 on earnings so with the stock closing down only 53 cents, volatility sellers came out victors. Implied volatility dropped to 19%, and premiums are only pricing in daily moves of 99 cents or 2.1%.

Alibaba (BABA)

Alibaba stock is on the mend after reporting earnings numbers worth celebrating last week. For the fiscal first quarter, China’s e-commerce juggernaut posted revenues of $16.74 billion, marking a 42% increase versus the year-ago quarter. The robust top-line growth helped drive adjusted income per share to $1.83.

Wall Street analysts were forecasting earnings of $1.46 per share on revenue of $15.8 billion.

A strong two-day rally carried BABA stock into the weekend and shares are up another 1.8% premarket. Its price trend has been a hot mess for months, but it’s at least now back above all major moving averages. Overhead resistance looms close at $180, so that’s the ceiling that needs to be smashed for the upside momentum to really fire up.

On the options trading front, traders came after calls with a vengeance. Activity swelled to 192% of the average daily volume, with 346,809 total contracts traded. Calls claimed 76% of the session’s sum.

With earnings now in the rearview mirror, implied volatility sank to 31% placing it at the 19th percentile of its one-year range. Premiums are pricing in daily moves of $3.46 or 2%.


Nvidia (NVDA)

Nvidia shares have spent much of 2019 mired in a trading range, but improving earnings may finally give bulls much-needed firepower. The graphics-chip giant released second-quarter earnings for fiscal 2020 after the bell Thursday and investors were pleased with the performance.

Although the year-over-year numbers saw double-digit percentage declines, they surpassed the Street’s estimates. For the quarter, revenue came in at $2.58 billion, and EPS arrived at $1.24.

The beat was enough to push NVDA stock up by 7.3%. Unfortunately, the price trend remains as uninspiring as ever. NVDA remains in the middle of its range and needs to break through $180 resistance before a bona fide uptrend takes root. Friday’s rally was a big first step, but many more are required before it can reclaim its former uptrend’s glory.

On the options trading front, traders favored calls throughout the session. Activity rose to 246% of the average daily volume, with 95,629 total contracts traded. Calls added 64% to the day’s take.

Implied volatility plunged to 38% or the 17th percentile of its one-year range. Premiums are now pricing in daily moves of $3.79 or 2.4%.

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.

More From InvestorPlace

The post Monday’s Vital Data: Applied Materials, Alibaba and Nvidia appeared first on InvestorPlace.

  • Is Guidewire Software Inc (GWRE) A Good Stock To Buy According To Hedgies?
    Business
    Insider Monkey

    Is Guidewire Software Inc (GWRE) A Good Stock To Buy According To Hedgies?

    Billionaire hedge fund managers such as David Abrams, Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the nearly unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

  • Is Kansas City Southern (NYSE:KSU) Worth US$145 Based On Its Intrinsic Value?
    Business
    Simply Wall St.

    Is Kansas City Southern (NYSE:KSU) Worth US$145 Based On Its Intrinsic Value?

    Today we will run through one way of estimating the intrinsic value of Kansas City Southern (NYSE:KSU) by projecting its future cash flows and then discounting them to today's value. We generally believe that a company's value is the present value of all of the cash it will generate in the future. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.

  • Will Apple Stock Reach $250 after Its Earnings?
    Business
    Market Realist

    Will Apple Stock Reach $250 after Its Earnings?

    Apple (AAPL) shares have been on an absolute tear this year. After falling more than 30% in the last quarter of 018, Apple has come back to life in 2019. Apple stock will likely rise due to iPhone forecast In October 2018, Apple CEO Tim Cook announced that the company will stop reporting device shipments.

  • Is Terex Corporation (TEX) A Good Stock To Buy?
    Business
    Insider Monkey

    Is Terex Corporation (TEX) A Good Stock To Buy?

    Hedge fund activity in Terex Corporation (NYSE:TEX) At the end of the second quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from the first quarter of 2019. By comparison, 21 hedge funds held shares or bullish call options in TEX a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

  • Is Zogenix, Inc. (ZGNX) A Good Stock To Buy?
    Business
    Insider Monkey

    Is Zogenix, Inc. (ZGNX) A Good Stock To Buy?

    Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

  • Opioid settlement reached with four drug companies: report
    Business
    Yahoo Finance Video

    Opioid settlement reached with four drug companies: report

    Four drug companies reached a settlement for their role in the opioid crisis. Yahoo Finance's Anjalee Khemlani joined On The Move to discuss

  • If You Had Bought Karyopharm Therapeutics (NASDAQ:KPTI) Stock Five Years Ago, You'd Be Sitting On A 71% Loss, Today
    Business
    Simply Wall St.

    If You Had Bought Karyopharm Therapeutics (NASDAQ:KPTI) Stock Five Years Ago, You'd Be Sitting On A 71% Loss, Today

    Given that Karyopharm Therapeutics didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

  • Buy UPS at These Key Levels on Holiday Shipping Spree
    Business
    TheStreet.com

    Buy UPS at These Key Levels on Holiday Shipping Spree

    United Parcel Service is a buy down to its monthly and semiannual pivots at $117.29 and $116.12, respectively. The stock is also above a key Fibonacci Retracement level on its weekly chart. UPS has been outperforming FedEx so far this year as several factors come into play.

  • Why InMode Deserves A Spot Among IBD 50 Stocks To Watch As It Forms A Cup Base
    Business
    Investor's Business Daily

    Why InMode Deserves A Spot Among IBD 50 Stocks To Watch As It Forms A Cup Base

    That's truly a very short time for any stock to form an IPO base. But the action was tight. The buy point was clear.

  • Tesla Earnings Week: Can It Repeat Last Year’s Magic?
    Business
    Market Realist

    Tesla Earnings Week: Can It Repeat Last Year’s Magic?

    Tesla's third-quarter earnings are scheduled this week. The stock tends to be volatile after its earnings release. While Elon Musk said that he expects the third quarter to be break-even, analysts expect a small loss for the company.

  • Liz Weston: Will you get what Social Security promises?
    News
    Associated Press

    Liz Weston: Will you get what Social Security promises?

    The Social Security Administration will happily forecast your future monthly retirement check. You can find yours online by creating a "My Social Security" account at the Social Security Administration's site, or you can call 800-772-1213 to request a paper version. Social Security projects how much you'll receive if you start benefits at the earliest age, 62, as well as what you'll get if you start instead at your full retirement age — currently 66 and rising to 67 for people born in 1960 or later — or at 70, when benefits max out.

  • 3 ‘Strong Buy’ Energy Stocks with Over 9% Dividend Yield
    Business
    TipRanks

    3 ‘Strong Buy’ Energy Stocks with Over 9% Dividend Yield

    The low prices have pushed down stock prices in the energy sector, which has paradoxically opened an opportunity for income investors. The energy sector's production companies benefit from dealing in commodities – oil and gas – that are always in demand. Low share prices are attractive to investors, and the companies have been following two strategies to boost their shares.

  • Why Is Snap Stock Rising ahead of Its Q3 Earnings?
    Business
    Market Realist

    Why Is Snap Stock Rising ahead of Its Q3 Earnings?

    We believe this revenue growth will come from Snap's robust user base. Snap's daily user base will grow to 205 million–207 million in the third quarter, as per the company's expectations. Its third-quarter user base was also 10.8% higher than in the previous year.

  • Jim Cramer: Canopy Growth Needs a Packaged Goods CEO
    Business
    Market Realist

    Jim Cramer: Canopy Growth Needs a Packaged Goods CEO

    I think he made the suggestion because Canopy Growth has expanded into the edibles market. Recently, the company announced that it's looking for a new CEO. According to a Growth Op article, the company will complete the new CEO transition by the end of the current calendar year.

  • Is Ionis Pharmaceuticals, Inc. (IONS) A Good Stock To Buy?
    Business
    Insider Monkey

    Is Ionis Pharmaceuticals, Inc. (IONS) A Good Stock To Buy?

    Hedge fund activity in Ionis Pharmaceuticals, Inc. NASDAQ:IONS) Heading into the third quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -18% from the first quarter of 2019. On the other hand, there were a total of 19 hedge funds with a bullish position in IONS a year ago.

  • 3 Days Left Until Atlas Copco AB (STO:ATCO A) Trades Ex-Dividend
    Business
    Simply Wall St.

    3 Days Left Until Atlas Copco AB (STO:ATCO A) Trades Ex-Dividend

    That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Thankfully its dividend payments took up just 30% of the free cash flow it generated, which is a comfortable payout ratio. It's encouraging to see that the dividend is covered by both profit and cash flow.

  • Examining Kosmos Energy Ltd.’s (NYSE:KOS) Weak Return On Capital Employed
    Business
    Simply Wall St.

    Examining Kosmos Energy Ltd.’s (NYSE:KOS) Weak Return On Capital Employed

    Today we'll evaluate Kosmos Energy Ltd. (NYSE:KOS) to determine whether it could have potential as an investment idea. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. First up, we'll look at what ROCE is and how we calculate it.

  • New Orleans Officials Demolish Cranes With Explosives After Deadly Collapse of Hard Rock Hotel
    U.S.
    Meredith Videos

    New Orleans Officials Demolish Cranes With Explosives After Deadly Collapse of Hard Rock Hotel

    New Orleans officials set off several thundering explosions Sunday intended to topple two cranes that had been looming precariously over the ruins of a partially collapsed hotel, but only one crane appeared to make it to the ground

  • Is Iron Mountain Incorporated (IRM) A Good Stock To Buy?
    Business
    Insider Monkey

    Is Iron Mountain Incorporated (IRM) A Good Stock To Buy?

    Is Iron Mountain Incorporated (NYSE:IRM) a cheap investment today? Prominent investors are in a pessimistic mood. The number of bullish hedge fund bets went down by 4 lately.

  • Can Exponent, Inc.'s (NASDAQ:EXPO) ROE Continue To Surpass The Industry Average?
    Business
    Simply Wall St.

    Can Exponent, Inc.'s (NASDAQ:EXPO) ROE Continue To Surpass The Industry Average?

    Does Exponent Have A Good Return On Equity? One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification.

  • Did Hedge Funds Drop The Ball On Jack in the Box Inc. (JACK) ?
    Business
    Insider Monkey

    Did Hedge Funds Drop The Ball On Jack in the Box Inc. (JACK) ?

    Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that's why their assets under management continue to swell). Is Jack in the Box Inc. (NASDAQ:JACK) a buy here? Hedge funds are selling.

  • Is Sanmina Corporation (SANM) A Good Stock To Buy?
    Business
    Insider Monkey

    Is Sanmina Corporation (SANM) A Good Stock To Buy?

    Hedge funds' top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 percentage points. Hedge fund interest in Sanmina Corporation (NASDAQ:SANM) shares was flat at the end of last quarter. At the end of this article we will also compare SANM to other stocks including The Simply Good Foods Company (NASDAQ:SMPL), Summit Materials Inc (NYSE:SUM), and Urban Edge Properties (NYSE:UE) to get a better sense of its popularity. Our calculations also showed that SANM isn't among the 30 most popular stocks among hedge funds (view the video below).

  • Hedge Funds Have Never Been This Bullish On Akcea Therapeutics, Inc. (AKCA)
    Business
    Insider Monkey

    Hedge Funds Have Never Been This Bullish On Akcea Therapeutics, Inc. (AKCA)

    How are hedge funds trading Akcea Therapeutics, Inc. NASDAQ:AKCA)? At the end of the second quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the previous quarter.

  • Hedge Funds Are Dumping Vishay Intertechnology, Inc. (VSH)
    Business
    Insider Monkey

    Hedge Funds Are Dumping Vishay Intertechnology, Inc. (VSH)

    Conversely, hedge funds' 20 preferred S&P 500 stocks generated a return of 24% during the same period, with the majority of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely.

  • Is Keurig Dr Pepper (NYSE:KDP) Using Too Much Debt?
    Business
    Simply Wall St.

    Is Keurig Dr Pepper (NYSE:KDP) Using Too Much Debt?

    As with many other companies Keurig Dr Pepper Inc. (NYSE:KDP) makes use of debt. Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price.