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Highs and Lows: Citigroup, Check Point, Dean Foods, and Travelers

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Citigroup, Dean Foods, and Travelers took notable runs higher today, while Check Point drifted lower.

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US stock markets ended in the red yesterday, as Wall Street sifted through corporate earnings season and a bigger-than-expected rise in weekly unemployment numbers. Against this backdrop, the number of stocks reaching new annual highs easily surpassed those at new lows. There were 217 annual peaks and only 10 bottoms on the NYSE, while the Nasdaq counted 81 new highs and 32 lows. Among the names charting notable moves today were Citigroup Inc. (NYSE:C), Check Point Software Technologies Ltd. (NASDAQ:CHKP), Dean Foods Company (NYSE:DF), and The Travelers Companies, Inc. (NYSE:TRV).
  • Extending its positive momentum on the heels of Monday's consensus-topping third-quarter report, Citigroup tagged a 14-month best of $38.72 yesterday. Technically speaking, the financial firm is having a great year, jumping 46% since January, and outperforming the broader S&P 500 Index (INDEXSP:.INX) by 36.5 percentage points over the past three months. As a result of this upswing, though, the security's Relative Strength Index (RSI) resides at 78 -- in overbought territory -- which suggests the shares may be due for a bit a of a breather soon.
  • Check Point ripped back to $40.60 yesterday morning, following its disappointing third-quarter results and fourth-quarter outlook. This news prompted several bearish brokerage notes, including price-target cuts from Nomura ($52 from $60), Jefferies ($52 from $57), Bank of America-Merrill Lynch ($47 from $52), and Lazard ($52 from $68). The tech company's 21.2% year-to-date loss could deepen, should the remaining upbeat analysts reconsider their positions. The average 12-month price target of $56.84 represents a 40% premium to yesterday's new nadir. Plus, Check Point tallies 12 "strong buys" and one "buy" rating, versus nine tepid "holds" and zero "sell" suggestions.
  • Moving on, Dean Foods climbed more than 7% yesterday to a more than two-year peak of $18.23, getting a lift via some initial public offering (IPO) news. It seems that one of Dean Food's units, WhiteWave Foods, said its IPO of 20 million shares will probably be priced between $14 and $16 apiece. On the charts, Dean Foods has been quite the standout, outpacing the SPX by 29 percentage points over the past 60 sessions, and surging 60.2% in 2012. Given this performance, it's not surprising to see bullish action in the options pits. The security's 50-day call/put volume ratio of 3.02 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 82nd percentile of its annual range, signaling that traders on these exchanges have made bullish bets over bearish at a faster pace than usual during the past 10 weeks. From a shorter-term perspective, the security's 10-day call/put volume ratio of 18.49 lands 13 percentage points from an annual high.
  • And in more earnings news, insurance giant Travelers beat analysts' projections with its strong third-quarter report. With that, the blue chip rallied to an all-time high of $74.70, amplifying its nearly 25% year-to-date return. Despite this technical and fundamental performance, pessimism is rampant among options traders. During the past two weeks, speculators on the International Securities Exchange ISE/CBOE/PHLX have bought to open 2.33 puts for every call. This ratio is in the 93rd percentile of its annual range, signaling that traders on these exchanges have rarely made bearish bets over bullish at a faster pace during the past year.
This article by Jim Cunningham was originally published on Schaeffer's Investment Research.

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