Tuesday’s Vital Data: Tesla Inc (TSLA), Gilead Sciences, Inc. (GILD) and Microsoft Corporation (MSFT)

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U.S. stock futures are showing signs of nerves this morning, as Wall Street prepares for Federal Reserve Chairwoman Janet Yellen to testify to the Senate Banking Committee later this morning. Yellen will also appear before the House Financial Services panel tomorrow, and analysts will be scrutinizing her testimony for any clues on the future of interest rate hikes and monetary policy - especially after Federal Reserve Bank of Philadelphia President Patrick Harker said last week that a rate hike was "on the table" for March.

Monday’s Vital Data: Apple Inc. (AAPL), Facebook Inc (FB) and Alibaba Group Holding Ltd (BABA)

On the options front, volume came in average heading into the weekend, as about 13.2 million calls and 12.9 million puts changing hands. On the CBOE, the single-session equity put/call volume ratio ticked higher to 0.67, while the 10-day moving average held at 0.61.

With monetary policy on the mind, the markets started lower, but at last check, futures on the Dow Jones Industrial Average were up 0.02%, S&P 500 futures were up 0.03% and Nasdaq-100 futures were roughly even.

Turning to Monday's volume leaders, Tesla Inc (NASDAQ: TSLA ) options volume was mixed following expectations that the company would tap capital markets in order to fund production of the Model 3 - which is scheduled to begin at the end of this month. Meanwhile, Gilead Sciences, Inc. (NASDAQ: GILD ) saw heavy call volume ahead of last night's clinical trial results for its new experimental HIV drug. Finally, Microsoft Corporation (NASDAQ: MSFT ) was flooded with calls ahead of today's ex-dividend date.

Tesla Inc (TSLA)

With earnings just around the corner - next Wednesday to be precise - Tesla is making waves on Wall Street after announcing that it will begin production of its Model 3 by the end of the month. News on the Model 3 front send TSLA stock higher, and prompted analysts at Oppenheimer to comment that Tesla could take advantage of its new stock highs to dip into the capital market to raise funds for Model 3 production, which could be seen as a bullish sentiment indicator.

So far, however, options traders are reluctant to get out in front of Model 3 production, or next week's earnings report. Volume on Monday came in at a brisk 301,000 contracts, but calls only accounted for 54% of the day's take. But the lull in call volume may be due to the fact that short-term traders are already heavily bullish on TSLA stock.

Looking at TSLA's 27 Feb action, the put/call open interest ratio comes in at 0.68, with calls clearly in command. Overall, implieds for the series are pricing in a potential move of about 7%, with the upper bound at $300 and the lower bound at $260.

Gilead Sciences, Inc. (GILD)

GILD stock rallied nearly 2% yesterday ahead of clinical trial data on the company's new HIV drug , and it appears that Gilead bulls are about to be rewarded. The company said that its HIV treatment, Bictegravir, delivered 97% virus suppression, which is just as effective as the leading HIV treatment made by GlaxoSmithKline Plc (ADR) (NYSE: GSK ). Furthermore, there were no cases of emerging resistance and no reported kidney problems, which can be an issue with HIV treatments.

GILD stock is up another 1% in premarket activity following the report, and yesterday's call traders have to be cheering the results. On Monday, GILD saw volume rise to 258,000 contracts, with calls snapping up 75% of the day's take.

Turning to the March series, options traders have taken out heavy call positions at the $67 through $75 strikes, with more than 5,500 contracts open at each. Peak call OI for the month numbers 7,600 contracts at the $75 strike, though that would be a long haul for GILD, which recently plunged on news of declining revenue for the company's Hep-C cure.

Microsoft Corporation (MSFT)

While MSFT stock received a nice pop near the end of January following Microsoft's quarterly report, the shares have been relatively quiet since. MSFT continues to hover just below long-term resistance in the $65-$66 region, though the longer-term trend remains steadily higher along support at its 10-week and 20-week moving averages.

On Monday, options traders flooded MSFT stock, with total volume hitting a near-term high of more than 650,000 contracts. Calls made up an impressive 82% of yesterday's activity. But the action doesn't appear to be any new wave of bullish expectations, with traders instead focusing on dividend capture strategies ahead of today's ex-dividend trading.

On that front, shareholders of record as of the close yesterday are eligible for a dividend of 39 cents per share, payable on March 9.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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The post Tuesday's Vital Data: Tesla Inc (TSLA), Gilead Sciences, Inc. (GILD) and Microsoft Corporation (MSFT) appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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