UA, W, and ABMD have outperformed this summer, and could have some fuel in the tank
After the SPDR S&P 500 ETF Trust (SPY) hit an all-time closing high of $213.50 on May 21, the exchange-traded fund (ETF) -- which is based on the broader S&P 500 Index (SPX) -- spent the next three months trapped in a range, before sinking with the broader equities market last week. The SPY is now trading just south of the round-number $200 level. However, as Schaeffer's Quantitative Analyst Chris Prybal pointed out, plenty of equities have held their own in this market environment, including athletic apparel maker Under Armour Inc (NYSE:UA), online marketplace Wayfair Inc (NYSE:W), and medical device maker ABIOMED, Inc. (NASDAQ:ABMD).
Below is the list of recent outperformers. We only focused on equities that: traded an average of at least a million shares per day; have weekly options; and are sitting above $10 a share.
From the aforementioned SPY top to yesterday's close, UA had advanced 14.7%. The stock is adding to that momentum this morning, up 3.9% at $94.36, with help from some broad-market tailwinds. During the recent correction, UA found support atop its 40-week moving average, which has contained several dips over the past few years. What's more, a short squeeze or a mass exodus of option bears could help the shares reclaim their throne in triple-digit territory.
Short interest represents more than six sessions' worth of pent-up buying demand, at Under Armour Inc's average pace of trading. Meanwhile, the stock's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) rests at 0.90 -- in the 81st percentile of its annual range. In other words, option buyers have initiated bearish bets over bullish at a faster-than-usual clip during the past two weeks.
As of last night, W was up an impressive 44.4% since May 21, and is adding to that lead today, up 1% at $43.46. In fact, the shares have more than doubled in 2015, and the massive August drubbing was contained by the equity's 50-day moving average, located in the $40 neighborhood -- a former speed bump for W.
Similar to UA, Wayfair Inc could resume its quest for all-time highs -- the stock peaked at $56.84 earlier this month -- should skeptics hit the bricks. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 3.57 indicates that traders have purchased more than three puts for every call during the past two weeks. Meanwhile, short interest accounts for a whopping 32% of W's total available float, hinting at plenty of cash on the sidelines.
Finally, the best performing stock within our parameters since May 21 is ABMD. The shares had soared more than 65% as of last night, and are up 0.9% today, at $98.06. The security gapped higher on Aug. 4 -- and finally took out resistance in the $80 region -- after ABIOMED, Inc. reported stronger-than-expected quarterly revenue. The stock touched a record peak north of $110 just a week later, and the recent broad-market swoon was stemmed by ABMD's 20-day moving average.
Even with ABMD up more than 155% in 2015, pessimism prevails. The stock's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.80 registers in the 80th percentile of its annual range, and its Schaeffer's put/call open interest ratio (SOIR) of 1.22 stands higher than 89% of all other readings from the past year. In other words, options traders -- especially of the short-term variety -- are more put-biased than usual.
Meanwhile, not even half the analysts following ABIOMED, Inc. consider it worthy of a "buy" or better rating. Likewise, the average 12-month price target of $103.67 is within striking distance of ABMD's current perch, reflecting the "meh" expectations. An unwinding of skepticism in the options arena, or a wave of upbeat analyst attention, could propel ABMD north of the century mark.