The Pharma Stock Hitting 15-Year Highs Today

By Emma Duncan / October 18, 2017 / www.schaeffersresearch.com / Article Link

U.S. stocks are trading mostly higher this morning, with strong IBM earnings sending the Dow to another new record above 23,000 -- even as the Nasdaq gives up early gains to trade slightly lower. Among the stocks making moves this morning are Sleep Number mattress parent Select Comfort Corp. (NASDAQ:SCSS), drug concern Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), and financial stock JPMorgan Chase & Co. (NYSE:JPM). Here's a closer look at what's moving shares of SCSS, SPPI, and JPM.

Select Comfort Erases Pre-Market Slump

Select Comfort was reeling ahead of the open after reporting a wider-than-expected third-quarter loss, but the stock has bounced back to trade 4.5% higher at $31.74 -- marking yet another post-earnings reversal for SCSS. The shares haven't made too much progress on the charts since their April bull gap, but SCSS is now in the process of bouncing from its rising 160-day moving average.

Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) suggests options traders were leaning bearish before SCSS's earnings report. The stock sports a 50-day put/call volume ratio of 3.19, which ranks in the 84th percentile of its annual range. This indicates that puts were purchased at a higher-than-usual rate relative to calls during the past 10 weeks.

Upbeat Drug Data Sends Spectrum Pharma Higher

Shares of Spectrum Pharmaceuticals have skyrocketed after the company reported positive data from a mid-stage study of its experiemental lung cancer drug. At last check, SPPI was trading up 36% at $19.67, and earlier set a new 15-year high of $21.38. The drug stock is currently sporting a year-to-date gain of 344% -- and with 13.7% of SPPI's float sold short, a rush to cover could contribute to additional upside.

JPM to Buy WePay

JPMorgan Chase announced that it plans to acquire online payment platform WePay for an undisclosed amount. JPM is fractionally higher at $97.77, after touching a new record high of $98.29 out of the gate.

Over the past year, JPM has consistently exceeded the options market's volatility expectations, withthe stock's Schaeffer's Volatility Scorecard (SVS) resting at an extremely high 99. And with the company's third-quarter earnings report out of the way, now is an opportune time to buy options at attractive prices; Schaeffer's Volatility Index (SVI) for JPM stands at a modest 15%, in the low 11th percentile of its annual range.

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