Q2 STOCKS TO BUY

Implied Volatility Pops as Chipotle Stock Goes Negative for 2017

A solar plant contract sends SPWR shares higher, while CMG tanks on reports of another norovirus outbreak

Managing Editor
Jul 18, 2017 at 3:06 PM
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U.S. stocks are mixed this afternoon, with the Dow struggling as Nasdaq rides a win streak. Solar stock SunPower Corporation (NASDAQ:SPWR), fast-casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG), and biotech stock Capricor Therapeutics Inc (NASDAQ:CAPR) are all making moves today. Here's a quick look at what's moving shares of SPWR, CMG, and CAPR.

Solar Plant Contract Has SunPower Stock Shining

SunPower stock is up 4.3% to trade at $10.83, after the company announced a contract to begin building a 10-megawatt solar photovoltaic power plant in Oklahoma. This is more good news for SPWR stock, which has tacked on a whopping 64% year-to-date. Since forming a base around the $6 area in late March and early April, SPWR has rallied along support at its 10-day, 20-day, and 40-day moving averages -- and is now on pace to close a third consecutive session above $10 per share, which hasn't happened since last September.

Analysts, however, remain skeptical. Of the 15 brokerages covering SWPR stock, 12 rate it a "hold."

Chipotle Options Volume Spikes on Norovirus Scare

Chipotle stock is among the worst performers on the S&P 500 Index (SPX) today, down 6.4% to trade at $366.50, after one of its Virginia restaurants was forced to close due to a suspected norovirus outbreak. The news has CMG trading in negative year-to-date territory for the first time since Jan. 4.

Amid this developing news, CMG options are trading at quadruple the expected intraday rate, with about 36,000 calls and 35,000 puts crossing the tape so far. Meanwhile, Trade-Alert notes the stock's 30-day at-the-money implied volatility has jumped 4.6 percentage points to 36.7% -- in the 88th percentile of its annual range. CMG will report second-quarter earnings a week from today.

Drug Designation Sparks Capricor Stock Double

Capricor stock is up 100% to trade at $1.37, after the Food and Drug Administration (FDA) granted the biotech a rare pediatric disease designation for CAP-1002, its treatment for Duchenne muscular dystrophy. Despite the rally today, CAPR has shed 48.5% year-to-date -- and after peaking at $1.62 earlier in the session, the stock is now trading just below its May 12 post-bear gap high of $1.38. 

 

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