Tuesday’s Vital Data: Advanced Micro Devices, Inc. (AMD), Micron Technology, Inc. (MU) and Nvidia Corporation (NVDA)

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U.S. stock futures are trending broadly higher this morning, as Wall Street looks to bounce back from Monday’s mixed session. Only the Nasdaq was able to eke out a victory yesterday, driven, once again, by strength in the semiconductor sector. Chips were also all the rage in the options pits yesterday, and could remain leaders in today’s trading as well.

Tuesday’s Vital Data: Advanced Micro Devices, Inc. (AMD), Micron Technology, Inc. (MU) and Nvidia Corporation (NVDA)Heading into the open, futures on the Dow Jones Industrial Average are up a moderate 0.12%, while S&P 500 futures have added 0.22% and Nasdaq-100 futures are hinting at record highs with early gains of 0.25%.

On the options front, volume dipped sharply yesterday, as only about 12.4 million calls and 11.1 million puts changed hands on the session. Over on the CBOE, the single-session equity put/call volume ratio once again moved higher, arriving at 0.64, while the 10-day moving average held at 0.63.

Semiconductor manufacturers were among the top vote-getters in Monday’s options activity. Leading the charge was Advanced Micro Devices, Inc. (NASDAQ:AMD) after Jefferies & Co. boosted its price target on AMD stock and said the company could steal marketshare from Intel Corporation (NASDAQ:INTC). Elsewhere, Micron Technology, Inc. (NASDAQ:MU) attracted a flood of call options as traders prepared for Thursday’s quarterly earnings report. Finally, Nvidia Corporation (NASDAQ:NVDA) was reiterated with a “buy” at Goldman Sachs, broke above its 50-day moving average and was lifted by news of strong Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) Switch sales.

Tuesday’s Vital Options Data: Advanced Micro Devices, Inc. (AMD), Micron Technology, Inc. (MU) and Nvidia Corporation (NVDA)

Advanced Micro Devices, Inc. (AMD)

AMD stock was back with a vengeance on Monday, as the shares rallied nearly 7% after Jefferies & Co. reiterated its “buy” rating and lifted its price target to $16 from $13. According to Jefferies, AMD can steal market share from industry leader Intel, with the brokerage firm laying out scenarios in which AMD could capture up to 15% of the server, desktop and notebook markets.

The report rallied AMD call options traders, as these typically bullish bets accounted for 60% of the more than 540,000 contracts traded on the stock. What’s more, sentiment continues to rise on AMD among near-term options traders, with the April put/call open interest ratio falling from a reading above 0.90 last month to its current perch at 0.74.

In layman’s’ terms, calls are being added at a faster pace that puts, indicating rising bullish expectations from speculative short-term traders. With AMD stock on the rise, this growing preference for calls could be a sign that smart money is moving back into the shares.

Micron Technology, Inc. (MU)

As Josh Enomoto said on Friday, “Buying into momentum is always tough, but MU stock has strong justifications.” MU options traders certainly think so, as the stock was greeted with a veritable flood of call activity on Monday. Total volume arrived at more than 327,000 contracts, with calls accounting for a near-term high 87% of the day’s take. What’s more, the most popular strikes on the day — the 31 March $30 and $27.50 calls — expire soon, as traders position themselves ahead of Thursday’s quarterly earnings report.

Currently, Wall Street is expecting earnings to soar from a loss of five cents per share a year ago to a profit of 84 cents per share. Revenue is expected to surge more than 58% year-over-year to $4.65 billion. According to EarningsWhispers.com, expectations may be a bit higher, with the whisper number arriving at 89 cents per share.

With 31 March implieds hinting at sharp potential gains, MU stock could be trading north of $30 by the end of the week if the company can put up better than expected numbers on Thursday.

Nvidia Corporation (NVDA)

NVDA stock is also once again heading for overclocked territory. The shares received a significant boost on Monday, after Goldman Sachs reiterated Nvidia’s “Conviction Buy” status and its $130 price target. What’s more, NVDA stock also saw a lift from reports that the Nintendo Switch was nearly sold out stateside and that Nintendo was doubling production on its latest gaming console. Nvidia makes the graphics cards that drive Switch.

Compared to MU and AMD, options traders were a bit more reserved in their enthusiasm for NVDA on Monday. Volume still came in at an impressive 323,000 contracts, though calls only made up 58% of the day’s take. That said, optimism among the speculative options crowd is still trending higher, as the April put/call OI ratio has moved off near-term highs above 1.00 to arrive at 0.91 on Monday.

Furthermore, peak April call OI — totaling 10,700 contracts at the $110 strike — could be in the money before the end of the week. Meanwhile, peak April put OI — numbering 17,400 contracts at the $100 strike — appears to be more of the sell-to-open variety, hinting at more of a neutral-to-bearish attitude.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/tuesday-vital-data-advanced-micro-devices-inc-amd-micron-technology-inc-mu-nvidia-corporation-nvda/.

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