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Netflix Options Traders Could Be Kicking Rocks; HOG Stock Skids to New Low

Harley-Davidson cut its 2017 shipment forecast

Managing Editor
Jul 18, 2017 at 10:06 AM
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U.S. stocks are lower this morning, reacting to a fresh batch of blue-chip earnings. Among specific equities on the move are FAANG stock Netflix, Inc. (NASDAQ:NFLX), motorcycle mogul Harley-Davidson Inc (NYSE:HOG), and defense stock Lockheed Martin Corporation (NYSE:LMT). Here's a quick look at what's moving shares of NFLX, HOG, and LMT.

Subscriber Growth Sends Netflix Stock to New Heights

Netflix stock is up 9% to trade at $175.72, and just notched a new a record high of $177, after the company delivered an excellent earnings report. Netflix added 5.2 million new subscribers in the second quarter -- much more than expected -- and for the first time sports more foreign subscribers than domestic. In addition, the streaming giant offered an optimistic outlook for the rest of the fiscal year. As a result, Rosenblatt Securities upgraded NFLX to "buy" from "neutral." In addition, at least 16 brokerage firms upped their price target on NFLX, including J.P. Morgan Securities, which hiked its target to $210 from $178. 

However, recent Netflix options buyers may be kicking rocks. NFLX has a 10-day put/call volume ratio of 0.97 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which tops 86% of all other readings for the year. NFLX's resounding earnings win could cause bears to jump ship, prompting further gains. 

Shipment Forecast Sends Harley-Davidson Stock Skidding

Harley-Davidson stock is down 10.5% to trade at $46.61, and just touched an annual low of $46.33, after the famed motorbike company reported lackluster quarterly earnings and cut its shipments forecast for the year. In addition, Harley said it will announce job cuts today.

It's been a tough year for HOG stock, which has shed 20% year-to-date, and has seen its 80-day moving average act as stiff resistance since April. Analysts were already wary of the shares, with 15 out of 17 brokerages covering HOG stock rating it a "hold" or worse.

Earnings Beat Fuels Lockheed Martin Stock to All-Time Highs

Lockheed Martin stock is up 0.8% at $290.74, and earlier notched a new all-time high of $292.97, after the aerospace contractor reported stronger-than-expected earnings and upped its full-year forecast. It's been a year of steady growth for LMT stock, which has tacked on 16% year-to-date, with pullbacks contained by its 80-day moving average. 

Short-term options were attractively priced on Lockheed, even with earnings on the horizon. As of last night, LMT's Schaeffer's Volatility Index (SVI) of 16% stood higher than just 21% of all other readings from the past year, implying short-term option traders were pricing in relatively low volatility expectations. 

 

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