Volume Spike Investor » HPQ

Odds-Making: Is Brocade Really Bait For Dell? (BRCD, DELL, CSCO, HPQ)

247admin — Thu, 02 Jun 2011 15:17:09 +0000

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is seeing a price and volume spike this morning after an analyst named Paul Mansky at Canaccord Genuity noted that Dell Inc. (NASDAQ: DELL) should acquire the company. Our own take is that Brocade should have already been acquired, but here it remains an independent company and Cisco Systems Inc. (NASDAQ: CSCO) and Hewlett-Packard Co. (NYSE: HPQ) continue to pose threats.

The research causing the spike noted the following:

Dell has been busily assembling a full IT stack aimed at re-aligning the company away from secularly less attractive legacy businesses (e.g., PC) and incrementally toward future growth in the enterprise.
With Dell’s acquisitions of EqualLogic, Perot and Compellent (among others), Dell now has a beach head in three of the four primary layers of this stack – storage, servers and services.
Networking is the one crucial piece that is missing, but Dell has some limited networking technology in-house.
Dell has clearly been seeing success cross-selling Ethernet switching with servers and storage
The company has $7B of net cash on hand prior to any additional raise, equal to 23% of its market cap.

The most important note is, “Not owning this technology puts Dell at risk of simply hopping from one commoditized business into another.” Still, the analyst noted that he has no knowledge of any discussions between or around Dell and Brocade, nor does he suggest that there are any discussion he is unaware of.

The research call is driving Brocade today. At 11:10 AM EST shares are up 5.1% at $7.01 and shares hit a new 52-week high today at $7.20. We have seen about 225% of normal trading volume as there have already been about 23.1 million shares traded and the day is not even half-way done.

Normally we would not cover one research report in detail. The reason we do is that we have believed Brocade would be a target for many companies that want to stave off competition from Cisco, H-P, and a half-dozen other players.

If we had to make odds over any company which could or should acquire Brocade, Dell would be at the top of the list of companies which could benefit from such a deal.

JON C. OGG

With Hurd As New Pres, Oracle Jumps Pre-Market

247admin — Tue, 07 Sep 2010 12:45:38 +0000

IT appears that morning traders seem to approve of Software giant Oracle Corporation’s (NASDAQ: ORCL) acquisition of former Hewlett-Packard (NYSE: HPQ) CEO Mark Hurd. As of 8:41AM EDT, the stock is up $1.64 (7.16%) to $24.56. ORCL has already traded 1.91 million shares, with an average daily volume of 25.2 million.

Hurd resigned from HP recently after a fiasco involving sexual harassment charges and account inaccuracies.

-Michael B. Sauter

Unusual Options Volume Spikes on Friday (NLY, COCO, HPQ, PCS, NTAP, NFLX, PHM, SUN)

247admin — Fri, 13 Aug 2010 21:13:19 +0000

Friday had some incredibly wild options moves in select names on a standout basis. We tracked some very unique and strange moves in options of Annaly Capital Management, Inc. (NYSE: NLY), Corinthian Colleges Inc. (NASDAQ: COCO), Hewlett-Packard Company (NYSE: HPQ), MetroPCS Communications, Inc. (NYSE: PCS), NetApp Inc. (NASDAQ: NTAP), Netflix, Inc. (NASDAQ: NFLX), PulteGroup, Inc. (NYSE: PHM), and Sunoco Inc. (NYSE: SUN).

Annaly Capital Management, Inc. (NYSE: NLY) saw unusual put options trading volume. It looks like about 5-times normal trading volume. Normally we’d say this is downside protection, but it may have been in part due to rolling expirations from August to September. Over 16,000 were in the closest 3 August puts, and there were more than 20,000 of the September puts.

Corinthian Colleges Inc. (NASDAQ: COCO) gave a crazy read ahead of earnings next week. Of the AUG $6 PUTS, we saw 8,262 contracts trade versus an open interest of only 868 contracts. These expire next Friday and at a $6.66 close and a new 52-week range of $6.64 to $20.29, it seems like a serious bet was placed for an otherwise quiet option pattern.

Hewlett-Packard Company (NYSE: HPQ) is still seeing significant options trading. Some was roll date trading, but The open interest for the $42 strike and $45 strike grew by more than half each today after 15,347 and 13709 contracts traded in each respectively.

MetroPCS Communications, Inc. (NYSE: PCS) saw some unusual activity out in the speculative longer-dated calls. There were over 3,000 of the JAN-2011 $10 CALLS versus an open interest of 1,155 contracts.

NetApp Inc. (NASDAQ: NTAP) gave an options flag today… earnings are next week. The AUG $38 CALLS saw 4,206 contracts versus the open interest of 2,119 contracts. There were more than 9,000 more in AUG strike prices in the CALLS. There were also 4,080 of the AUG $38 PUTS versus an open interest of 2,321 contracts. Someone’s playing the straddle for earnings. We also saw some 9.875 of the September $40 CALLS trade versus an open interest of 4,395 contracts.

Netflix, Inc. (NASDAQ: NFLX) is not as strong as we saw this week in speculation, but one thing is obvious… The elevated put and call options trading is continuing and the reason is simple: getting leverage to upside and downside moves.

PulteGroup, Inc. (NYSE: PHM) saw a whopping 20,352 of the SEPT-2010 $8 PUTS versus a prior open interest of only 692 contracts. The $7 PUTS also saw 1,444 contracts trade versus an open interest of only 1 contract (yep, one).

Sunoco Inc. (NYSE: SUN) had a professional trader making a spread bet that is up to them to figure out but this one initially saw crazy volume in the AUG calls:

$Str Volume OpInt
$26 3,600 407
$27 6,300 695
$28 4,501 512
$29 20,000 850
$30 384,004 13,102
$31 26,400 1,264
$32 52,507 3,645
$33 6,306 1,394

Have a great weekend!

JON C. OGG

Blue Horseshoe (hates) Brocade?

247admin — Wed, 11 Nov 2009 22:04:14 +0000

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is getting its feelings hurt in after-hours trading after H-P (NYSE: HPQ) decided to spend $2.7 billion to buy 3Com (NASDAQ: COMS). Many have been under the assumption that Brocade Communications would be bought by H-P. The good news is that someone else may now need to look at Brocade. But the bad news is that Brocade is being slapped around. The stock is down 7% at $8.60 in after-hours trading. As of 5:02 BRCD has also traded 2.8 million shares in the after-hours session alone.

JON OGG

Looking for Support Levels in Hewlett-Packard (HPQ)

247admin — Wed, 19 Aug 2009 12:28:02 +0000

Hewlett-Packard Company (NYSE: HPQ) is already throwing up a trading alert for day traders this morning. Some may be the market weakness indicated, but some is on the needed sell-off after you look at how much H-P ran up ahead of yesterday’s earnings reports. Shares are down 2% at $42.98 on over 200,000 shares as of 8:24 AM EST. We looked at the charts and at technical levels to determine further support levels. From here after a drop of over 2% we’d note chart support lines if shares continue to pull back at close to $42.25, $41.50, and then down close to $40.10 for much much stronger support. Again, those are more long-term and are not 5-minute support lines.

HP trades over 16 million shares per day, and we’d expect that volume to be hit by mid to late morning.

-JON OGG

Trader Alert: H-P (HPQ)… Watch Key Moving Averages

247admin — Tue, 18 Nov 2008 15:12:12 +0000

Hewlett-Packard (NYSE: HPQ) is trading up 13% on its strong guidance. Shares are up at $33.30 in pre-market trading as of 9:08 AM EST. We have already seen over 3 million shares trade hands. You can read the full details at the link above, but this has put in a bid elsewhere at rivals and peers in technology stocks.

The 52-week trading range is $28.23 to $52.90. What we want to focus on are the near-term moving averages since the 50-day and 200-day moving averages are so far north of even the gap-up price that it shouldn’t matter.

5-DAY MVG AVG $31.18
10-DAY MVG AVG $33.28
20-DAY MVG AVG $34.40

JON OGG

NOV. 18, 2008