First Solar Shorts Flee, While Amazon Claims Another Victim

By Emma Duncan / October 27, 2017 / www.schaeffersresearch.com / Article Link

U.S. stocks are trading higher this morning after another positive round of earnings reports. Among the stocks making moves this morning are solar energy solutions provider First Solar, Inc. (NASDAQ:FSLR), retailer J C Penney Company Inc (NYSE:JCP), and drugstore chain CVS Health Corp (NYSE:CVS). Here's a closer look at what's moving shares of FSLR, JCP, and CVS.

FSLR Earnings Send Short Sellers Scrambling

After FSLR last night reported a substantial third-quarter earnings beat, J.P. Morgan raised its price target on the stock to $58 from $50, alongside a Bairdraise to $53, and a Cowen and Company hike to $60 from $57. Up 18.4% to $56.75 at last check, FSLR earlier touched a new annual high of $57.42, gapping away from recent support at its 80-day moving average.

Short interest on FSLR dropped by a massive 46% during the past two reporting periods, but still accounts for over 7% of the equity's available float. With a short interest ratio of 4.4 days to cover, some of the stock's post-earnings pop this morning could be the result of a short squeeze.

J C Penney Hits Fresh Low After Cutting Q3 Forecast

Shares of J C Penney have collapsed after the company slashed its 2017 profit and revenue guidance. At last check, JCP is down 19% at $2.96, just off its fresh record low of $2.76 set earlier in the session. Down 64% on the year, JCP recently endured a rejection at its 30-day moving average.

Near-term JCP options traders are put-heavy, as evidenced by the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.38 -- which ranks in the 95th percentile of its annual range. And with 52% of the equity's float sold short, there are quite a few JCP bears cheering the stock's slump to all-time lows this morning.

CVS Slips on Rumored Aetna Bid, Amazon Threat

CVS is making headlines after the drugstore chain reportedly submitted an offer to acquire healthcare benefits company Aetna (AET) for $200 per share, though neither company has confirmed or denied the speculation as of yet. CVS is down 2% at $71.84, with the stock also feeling the pressure of Amazon's (AMZN) freshly obtained pharmaceutical licenses.

At the ISE, CBOE, and PHLX, CVS stock sports a 10-day call/put volume ratio of 2.48, which ranks in the 96th percentile of its annual range. This top-heavy ratio suggests calls have been bought to open at a faster-than-usual clip relative to puts during the past two weeks, despite the stock's year-to-date drop of roughly 9%.

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