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Monday’s Vital Data: Nvidia Corporation (NVDA), Advanced Micro Devices, Inc. (AMD) and Tesla Inc (TSLA)

Options activity provides a look at expectations on NVDA, AMD and TSLA

By Joseph Hargett, InvestorPlace Contributor

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U.S. stock futures are bouncing around breakeven this morning, as trading on Wall Street thins out heading into the Thanksgiving holiday week. Weakness in equities is beginning to show, as both the S&P 500 Index and the Dow Jones Industrial Average logged their second straight week of losses. Concern is rising that Republicans will have trouble passing their current tax plan, and investors expect no real progress until after the holiday-shortened week.

Monday’s Vital Data: Nvidia Corporation (NVDA), Advanced Micro Devices, Inc. (AMD) and Tesla Inc (TSLA)As a result, Dow futures are up 0.12% heading into the open, followed by S&P 500 futures with a gain of 0.11%. Nasdaq-100 futures, meanwhile, are up 0.16%.

On the options front, volume was brisk on Friday as November series options expired. Overall, about 21.7 million calls and 16.9 million puts changed hands. On the CBOE, the single-session equity put/call volume ratio plunged to 0.56 — a four-week low — while the 10-day moving average held at 0.65.

Turning to Friday’s options activity, Nvidia Corporation (NASDAQ:NVDA) saw a bump in call option trading following a positive research note from RBC Capital Markets. Meanwhile, Advanced Micro Devices, Inc. (NASDAQ:AMD) was also bullishly featured at Canaccord Genuity. Finally, Tesla Inc (NASDAQ:TSLA) drew a touch of analyst ire due to the timing of the announcement for its new roadster.

Monday’s Vital Options Data: Nvidia Corporation (NVDA), Advanced Micro Devices, Inc. (AMD) and Tesla Inc (TSLA)

Nvidia Corporation (NVDA)

RBC Capital Markets helped drive bullish speculation on NVDA stock on Friday. The ratings firm reiterated NVDA at “outperform” and lifted its price target to $250 from $240. What’s more, RBC said that rising demand for Nvidia’s data center, gaming and automotive chip businesses could push NVDA stock to $300 in a best case bull scenario.

Options traders were light on volume, but heavy on calls for NVDA on Friday. Roughly 185,500 contracts traded on NVDA, with calls accounting for 59% of the day’s take. Recent call activity for NVDA stock, however, has leaned toward the profit taking end of the spectrum.

Specifically, the stock’s December put/call open interest ratio continues to rise, arriving at 1.41 this morning — up from 1.36 on Thursday last week. Rising negativity could provide short-term drag on NVDA as the shares look to consolidate recent gains into the $210 region.

Advanced Micro Devices, Inc. (AMD)

Intel Corporation (NASDAQ:INTC) recently poached AMD’s  Radeon Technologies chief architect Raja Koduri. The news has provided considerable drag for AMD stock, as investors worry about future development for the red-hot semiconductor maker. However, analysts at Canaccord Genuity downplayed the issue.

“We believe the team and roadmap are in place such that departure of RTG lead Raja Koduri will have minimal near-term impact,” Canaccord said in a research note. The firm reiterated its “buy” rating and $20 price target for AMD stock.

The report appeared to placate AMD options traders. Volume jumped to over 293,000 contracts following the news, with calls gobbling up 80% of the day’s take. What’s more, bullish sentiment is heavy in the December series, with the put/call OI ratio arriving at 0.61, with calls nearly doubling puts among front-month options.

Peak December call OI currently totals more than 24,000 contracts at the overhead $12 strike, while peak put OI for the series totals 9,700 contracts at the $10 strike.

Tesla Inc (TSLA)

Now that the furor has died down a bit, analysts are beginning to question the timing of Tesla’s latest roadster announcement. On Thursday night, Tesla officially announced its electric semi truck, but the company also unexpectedly blindsided investors with plans for a new roadster.

“In essence, all last night’s event did was add to Elon Musk’s shopping list of things he needs to spend money on at a time when the company is having difficulty making its base vehicle (Model 3), and its equity and debt has traded off,” Cowen analyst Jeffrey Osborne quipped. Some even called the new Tesla announcement a distraction from Model 3 production issues.

On Friday, TSLA attracted considerable volume in the options pits, with more than 380,000 contracts changing hands.

That said, calls only made up about 59% of the day’s take, which was below average for TSLA. Looking out to December, it’s clear there is more than a little negativity hanging over Tesla, as the put/call OI ratio arrives at 1.26, up sharply from November’s reading of 0.92 taken last Tuesday.

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/2017/11/monday-vital-data-nvidia-corporation-nvda-advanced-micro-devices-inc-amd-tesla-inc-tsla/.

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