Tuesday’s Vital Data: Tesla, Netflix and Intel

An image of a pair of glasses on a newspaper
Credit: Shutterstock photo

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

U.S. stock futures are trading lower as traders return from a three-day weekend.

Ahead of the bell, futures on the Dow Jones Industrial Average are down 0.66% and S&P 500 futures are lower by 0.68%. Nasdaq-100 futures have shed 0.76%.

In the options pits, call volume exploded on Friday, helping to drive overall volume to levels we haven't seen in a long time. Specifically, about 27.6 million calls and 21.3 million puts changed hands on the session. Combined with the sharp price rise in market indexes on Friday, the groundswell in call buying strikes me as panic buying.

The bullish stampede made waves at the CBOE, where the single-session equity put/call volume remained subdued at 0.54. Meanwhile, the 10-day moving average slipped to 0.63.

Here were three stocks landing atop the most-actives list on Friday. Tesla (NASDAQ: TSLA ) was flooded with activity after announcing it's trimming its workforce by 7%. Netflix (NASDAQ: NFLX ) finally succumbed to gravity after posting earnings. Finally, Intel (NASDAQ: INTC ) saw a jump in call volume ahead of a critical resistance test.

Let's take a closer look:

Tesla (TSLA)

Investors smashed Tesla shares on Friday after the company's CEO, Elon Musk, announced Tesla is trimming its full-time staff by 7%. You can read the full details of the announcement at CNBChere .

By day's end, TSLA stock had fallen just shy of 13% amid heavy selling pressure. The plunge places the stock back into the heart of its year-long trading range officially unwinding all of its year-to-date gains. It also places the shares back below all major moving averages.

On the options trading front, traders bid up put options for protection. Total activity climbed to 364% of the average daily volume, with 574,166 total contracts traded. Puts contributed 56% to the day's take.

The increased demand drove implied volatility higher on the day to 81%, placing it at the 60th percentile of its one-year range. Premiums are now pricing in daily moves of $15.49, or 5.1%, so expect large gyrations to persist for a while.

Netflix (NFLX)

The relentless rally in Netflix that carried it 53% higher since the late-December low turned out to be an impressive feat of market efficiency. It priced in all the positive developments scored last quarter that were released on Thursday night during the company's earnings report. As a result, Netflix - which is usually a large earnings gapper - opened virtually unchanged on Friday morning.

Well played, Mr. Market, well played.

On the options trading front, calls slightly outpaced puts on the session. Total activity swelled to 264% of the average daily volume, with 519,279 total contracts traded. Calls added 55% to the day's tally.

Implied volatility experienced the typical post-earnings crush, falling to 43%, or the 38th percentile of its one-year range. Though the stock fell 4% by day's end, it opened virtually unchanged after the earnings release which brought big profits to traders who made short volatility bets ahead of the event. Now premiums are pricing in daily moves of $9.20 or 2.7%.

Intel (INTC)

One glaring sign of the improvement in market conditions is the rebound in semiconductors. The chip industry was one of the leaders of the bull market and had been laid low during the Q4 beatdown. But its action so far in 2019 has been resilient, and the most popular ETF for the space scored a high volume breakout back above its 50-day moving average on Friday.

Against this backdrop, INTC stock has climbed back to a critical overhead resistance level near $49. A breakout above here will signal the stock's uptrend is back on track.

On the options trading front, traders came after calls with a vengeance. Activity increased to 192% of the average daily volume, with 135,808 total contracts traded. 76% of the trading came from call options.

Implied volatility slipped on the day to 34%, placing it at the 54th percentile of its one-year range. Options are pricing in an earnings move later this week of $2.28, or 4.6%.

As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently releasedBear Market Survival Guideto learn how to protect your portfolio against a market crash.

More From InvestorPlace

Compare Brokers

The post Tuesday's Vital Data: Tesla, Netflix and Intel 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.

In This Story


Other Topics


Latest Markets Videos