Tuesday, March 16, 2010

Rumors Drive Volume (GGP, SPG, HOG)

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The rumor mill is back.  It is also tiring.  Today we had two gainers seen in General Growth Properties Inc. (NYSE: GGP) and in Harley-Davidson, Inc. (NYSE: HOG).  Details on each are as follows, along with unofficial closing bell levels.

General Growth Properties Inc. (NYSE: GGP) just spiked at the end of the trading day on rumors that a higher bid was coming from Simon Property Group (NYSE: SPG).  Shares turned in an unofficial closing bell of +2.64% at $15.14 on 3.8 million shares.  Average volume is 3.9 million shares but this one ripped up from $14.50 to over $15.00.  The official close will likely be slightly different.

Harley-Davidson, Inc. (NYSE: HOG) was crazy today on KKR-led buyout rumors.  The ‘buyout rumor mill’ is back strong now that the market has become more enthusiastic.  This one is hard to imagine on the surface with a $6.6+ billion market cap before any buyout premium.  Its 52-week range is $10.86 to $30.00 and today’s high was $28.98.  We have an unofficial closing bell level of being up almost 7% at $28.34 on more than 18 million shares versus an average closer to 3.3 million shares per day.


Stock/Option Explosion: The GE Breakout on 52-Week Highs (GE)

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General Electric Co. (GE) is seeing a break-out.  Yesterday it was Goldman Sachs, today JPMorgan helping with comments on the conglomerate.  The prior 52-week high was $17.52 that was hit back on September 19 2009 after it went ex-dividend.  This morning shares opened up at $17.49 after a $17.29 close on Monday.  Now shares are trading at $17.65 and we have seen a high print of $17.68 this morning.

What is most impressive is that GE’s share volume today is through  the roof… At 10:31 AM EST we have seen 63 million shares trade hands versus an average daily volume of 73 million shares.

Also impressive is the stock options volume today.  We have seen over 20,000 of the MARCH-2010 $17.50 CALLS trade versus an open interest of 174,000+ contracts.  Based on the last trade, those only have to hit $17.77 for the trade to be profitable (before commissions and fees).

We have also seen almost 30,000 contracts in various strikes trade of the APRIL-2010 CALLS….

Stay tuned.  If today will hold, this is probably a breakout.  You know the old mantra… “Stocks hitting 52-week highs tend to keep hitting 52-week highs.”