Goldman, Options Traders Shift to Bear Mode on Tesla Stock – Schaeffers Research (blog)

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Electric car concern Tesla Inc (NASDAQ:TSLA) and mobile tech name Qualcomm, Inc. (NASDAQ:QCOM) have both racked up unusually heavy options volume in recent weeks. In fact, both stocks showed up on Schaeffer’s Senior Quantitative Analyst Rocky White’s list of 20 stocks that have attracted the highest amount of options volume during the past 10 trading days. The highlighted names in the table below are new additions since the last time the filter was run.

Tesla Put Options Approach Peak Popularity

Shares of Tesla stock have been rocked lately by CEO Elon Musk’s Twitter rants — and now that Goldman Sachs is no longer serving in an advisory role in the company’s since-abandoned plans to go private, the brokerage firm this morning reinstated coverage on TSLA with a “sell” rating and $210 price target.

That bearish rating aligns with the mood in the options pits. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows TSLA with a 10-day put/call volume ratio of 1.09, ranking in the 93rd annual percentile. This suggests puts have been purchased over calls at a faster-than-usual clip during the past two weeks.

Plus, the equity’s Schaeffer’s put/call open interest ratio (SOIR) comes in at 2.34, which ranks in the 98th percentile of its annual range. This indicates that short-term options players have been more heavily skewed toward puts over calls on TSLA just 2% of the time during the past year.

TSLA is trading down 3% at $292.42 this afternoon. The stock is down 16% year-over-year, but its lows have been contained in recent months by the round $290 level.

Calls Explode on Outperforming Qualcomm Stock

Meanwhile, QCOM has seen an influx of calls during the past two weeks of trading, as per the table above, as well as the stock’s 10-day call/put volume ratio of 4.80 at the ISE/CBOE/PHLX. This ratio ranks in the 82nd percentile of its annual range, confirming calls have been bought to open over puts at a quicker-than-usual pace.

Qualcomm stock has been trending higher since its late-April lows around the $50 level. The stock staged a post-earnings bull gap  in late July that put the shares back above support at the $62 mark and their 160-day moving average, with additional tailwinds stemming from its $10 billion buyback announced days later. The tech stock touched a fresh annual high of $70.48 last Tuesday, and is up nearly 9% year-to-date.

In today’s trading, QCOM is up 2.5% at $69.77 after a Macquarie upgrade to “outperform” from “neutral,” and a price-target hike to $84 from $65. The firm said it sees reward outweighing risk on the telecommunications concern. Brokerage firm Nomura also gave its two cents, lifting QCOM’s price target to $80 from $70.

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