Next week marks the end of the third quarter
Healthcare stocks Align Technology, Inc. (NASDAQ:ALGN), Illumina, Inc. (NASDAQ:ILMN), and Eli Lilly And Co (NYSE:LLY) have put in tremendous technical performances this year, with all three trading near new highs. What's more, ALGN, ILMN, and LLY could be in store for even more upside next week, with data from Schaeffer's Senior Quantitative Analyst Rocky White suggesting "window dressing" could boost the outperforming stocks at the end of the third quarter.
ALGN Shareholders May Be Hedging With Put Options
Since taking a sharp bounce off its 140-day moving average in late April, Align Technology stock has added 63% to trade at $383.23. What's more, the shares are within a chip-shot of their Sept. 17 record high of $393.98, with the recent pullback from here contained by familiar support at ALGN's 20-day moving average.
Options traders have been bracing for a bigger retreat, per the stock's 10-day put/call volume ratio of 1.75 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 79th annual percentile. This indicates puts have been bought to open over calls at a faster-than-usual clip, though some of this could be at the hands of shareholders initiating an options hedge.
Options Bears, Shorts Target Surging Illumina Stock
Illumina has sailed to a nearly 60% year-to-date lead thanks to lifts from its 30-day and 40-day moving averages. While the stock is paring a portion of these gains today -- last seen down 0.8% at $348.06 -- its holding near its Aug. 31 all-time peak of $357.93, and finding a foothold atop its 20-day moving average.
Put buyers have also been busier than usual in ILMN's options pits, per the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.25 -- in the 86th percentile of its 12-month range. Skepticism has ramped up elsewhere, with short interest up 26.4% in the two most recent reporting periods. This points to sideline cash available to fuel more upside.
Eli Lilly Stock Overdue for Bullish Brokerage Notes
Since dipping below the $75 mark last March, Eli Lilly shares have shot up 43% to trade at $106.81. The pharmaceutical stock hit an 18-year high of $107.84 on Sept. 10, with support just below at its 20-day moving average.
Analysts have been slow to react to LLY stock's surge up the charts, with six of 11 still maintaining a lukewarm "hold" rating. Additionally, the average 12-month price target of $98.29 is a nearly 8% discount to current trading levels. This leaves the door open for upgrades and/or price-target hikes, which could draw more buyers to Eli Lilly's table.