Are These Finance Stocks About to Get Stuffed? – Schaeffers Research (blog)

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Can financial names JPMorgan Chase & Co. (JPM), Morgan Stanley (MS), and Fidelity National Information Services (FIS) buck their historical Thanksgiving week trend?

With Thanksgiving approaching, we’ve been looking at which stocks tend to outperform around the holiday. Today, though, we’re going to analyze three names that could underperform during the holiday week. Specifically, financial firms JPMorgan Chase & Co. (NYSE:JPM)Morgan Stanley (NYSE:MS), and Fidelity National Information Services (NYSE:FIS) ​could all be in store for a rough few days. All Thanksgiving week data is courtesy of Schaeffer’s Senior Quantitative Analyst Rocky White. 

Starting with JPM, it has actually averaged a Thanksgiving week gain of 2.7%. However, over the past 10 years, it’s only posted positive Thanksgiving week showings three times. Option traders certainly haven’t been planning for a downward move. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock as accumulated a call/put volume ratio of 2.08 — higher than 91% of all other readings from the past year. If JPMorgan Chase & Co. again hits Thanksgiving headwinds, an unwinding of optimism could work against the stock. At last check, JPM has edged slightly higher at $67.70. 

MS, too, sports a positive average turkey week return of 3%. Still, it has only seen three positive weekly outcomes during the past 10 years. In the meantime, speculators have been scooping up puts like crazy. Morgan Stanley’s 10-day put/call volume ratio at the ISE, CBOE, and PHLX stands at 3.16 — only 1 percentage point from an annual high. Technically speaking, MS was firmly rejected by its 100-day moving average earlier in the month — a trendline it hasn’t topped on a closing basis since early August. The shares were last seen 0.7% lower at $33.93. 

Finally, FIS, like the other two stocks, has posted a positive average Thanksgiving week return of 1.9% over the past decade, but only closed higher three times. This time around, option traders aren’t positioned well for a pullback. The equity’s Schaeffer’s put/call open interest ratio (SOIR) comes in at 0.65, meaning call open interest outweighs put open interest among options expiring within three months. This call bias is surprising, too, considering Fidelity National Information Services has trailed the S&P 500 Index (SPX) by more than 10 percentage points during the past two months. The shares are higher today, though, picking up 0.5% at $66.39.