Tuesday’s Vital Data: Advanced Micro Devices, Inc. (AMD), Tesla Inc (TSLA) and Micron Technology, Inc. (MU)

Advertisement

U.S. stock futures are inching higher as the Federal Open Market Committee begins its two-day meeting on U.S. monetary policy. No rate hike is expected, but Wall Street will be looking for indications on how the Fed plans to wind down its $4.5 trillion portfolio of government securities. Furthermore, traders will also be watching for signs the Fed will hike rates again in December — the odds for which currently stand at 50%.

Tuesday's Vital Data: Advanced Micro Devices, Inc. (AMD), Tesla Inc (TSLA) and Micron Technology, Inc. (MU)Against this backdrop, futures on the Dow Jones Industrial Average have risen 0.04%, S&P 500 futures have added 0.06% and Nasdaq-100 futures are up 0.05%.

Turning to options activity, volume fell off sharply on Monday, with only about 15.3 million calls and 12.9 million puts changing hands. Meanwhile, the CBOE single-session equity put/call volume ratio dipped to 0.61, while the 10-day moving average ticked higher to 0.61.

Taking a closer look at Monday’s volume, Advanced Micro Devices, Inc. (NASDAQ:AMD) saw a jump in call activity after analysts at Arthur Wood issued a bullish projection for Epyc server chips. Elsewhere, Tesla Inc (NASDAQ:TSLA) continued to ride high ahead of next month’s electric big-rig reveal. Finally, Micron Technology, Inc. (NASDAQ:MU) attracted increased call option volume after Evercore ISI boosted its price target on MU stock.

Tuesday's Vital Options Data: Advanced Micro Devices, Inc. (AMD), Tesla Inc (TSLA) and Micron Technology, Inc. (MU)

Advanced Micro Devices, Inc. (AMD)

AMD will finally take back market share in the server market from Intel Corporation (NASDAQ:INTC) analysts at Arthur Wood Research said yesterday. AMD is ramping up production for server-oriented Epyc chips, and “wafer yield at GlobalFoundries’ Malta fab is approaching 95%,” Arthur Wood stated. The increased focus on new Epyc server chips should give AMD an edge in the market and help it claw back server market share from Intel.

AMD stock jumped roughly 4.5% following the report, and options traders chased the rally. Volume on Monday rose to 268,000 contracts, more than doubling AMD’s daily average. Furthermore, calls made up a hefty 71% of the day’s take — also well above average.

Bullish sentiment is gaining ground in the AMD options pits, and this bodes well for the shares. During the past month, the October put/call open interest ratio has fallen from readings above 0.90 to its current perch at 0.74. Clearly, there is more room on the bullish bandwagon, and additional call activity could indicate options traders are looking for AMD to extend its current rally.

Tesla Inc (TSLA)

TSLA stock has quite a bit rally fuel right at the moment. The company is ramping up Model 3 production, as reservations for the vehicle top 500,000. Meanwhile, Tesla will unveil its all-electric big rig next month. And if that wasn’t enough, China recently said that it will eventually ban all fossil fuel vehicles in the country, paving the way for an electric vehicle revolution in one of the fastest growing economies in the world.

It’s no surprise, then, that TSLA stock has broken out to fresh all-time highs this week … and options traders are looking to capitalize. Volume on TSLA rose to 192,000 contracts on Monday, with calls claiming 59% of the day’s take.

Surprisingly, this level of call activity is actually above average for TSLA, where options traders have taken a decidedly negative stance on the shares. For instance, the October put/call OI ratio currently rests 1.09, with puts outnumbering calls among front-month options. An unwinding of this negativity could bring sideline money to the table for TSLA stock, potentially furthering the shares’ trek into all-time high territory.

Micron Technology, Inc. (MU)

MU stock appears to be back on track after the shares took several months off to consolidate an impressive year-long rally. Yesterday, Evercore ISI provided a boost in that renewed rally, lifting its price target to $50 and reiterating its “outperform” rating. According to Evercore, the rally should continue due to a sustainable DRAM cycle driven by improving demand and an acceleration in storage and processing.

Options traders renewed their bullish stance on MU stock following Evercore’s note. Volume jumped to 185,000 contracts, with calls gobbling up 67% of the day’s take. The trend remains toward MU call options in the October series, as well, with the put/call OI ratio for front-month options arriving at 0.56.

MU is now trading just shy of all-time high territory, and a breakout above $36 could provide just the boost the stock needs to hit those new highs.

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/2017/09/tuesday-vital-data-advanced-micro-devices-inc-amd-tesla-inc-tsla-and-micron-technology-inc-mu/.

©2024 InvestorPlace Media, LLC