Call Traders Jump On Macy's Stock Rally – Schaeffers Research

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Stocks are mostly lower so far today. Among the names making the biggest moves are retail stock Macy’s, Inc. (NYSE:M), drugmaker Insys Therapeutics Inc (NASDAQ:INSY), and semiconductor specialist Micron Technology, Inc. (NASDAQ:MU). Here’s a quick look at what’s moving shares of M, INSY, and MU. 

Retail Rally Lifts Rebounding Macy’s Stock

Macy’s stock is pacing for its highest close since early May, as upbeat holiday sales data boosts the retail sector today. The shares were last seen trading 5.1% higher at $26.98, and have added 55% since their Nov. 7 low of $17.41. Some options traders could be betting on more upside, too, since the weekly 12/29 26-strike call is seeing heavy volume today.

If speculators are buying to open the call, it would only mirror the recent activity in M’s options pits. That is, the equity has a 10-day call/put volume ratio of 2.05 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), meaning call buying has more than doubled put buying over the past two weeks.

FDA Nod Boosts INSY Stock

Shares of Insys Therapeutics have rallied 22.2% to trade at $8.70, thanks to news the Food and Drug Administration (FDA) gave fast-track status to the company’s cannabidiol treatment for Prader-Willi syndrome. The price action puts INSY stock above a downsloping trendline that’s stiffly blocked breakout attempts since the May 31 peak of $15.02.

Meanwhile, short sellers are getting burned. These bears control 9.7 million shares of Insys Therapeutics, which is 15 times its average daily trading volume. This is plenty of sideline cash to fuel a short squeeze, especially when you consider short interest just dropped 10% in the last two reporting periods.

Apple Woes Drag Down MU Shares

Micron stock is pulling back amid heavy trading volume, last seen 4.6% lower at $42.10, due to headwinds from today’s negative iPhone X reports. Of course, the shares remain up 92% in 2017, and appear to again be seeing support from the 80-day moving average.

Only time will tell if the iPhone concerns will shake analysts’ confidence. As it stands now, 19 of 21 brokerage firms that coverage MU stock say it’s a “buy” or “strong buy.” Moreover, its average 12-month price target stands up at $58.79.

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