2 Stocks to Watch as Apple Shares Sell Off

Weakness in Apple stock is weighing on a number of other in the technology sphere

Jun 12, 2017 at 3:13 PM
facebook X logo linkedin

With Apple stock in the middle of a substantial pullback, a number of the company's suppliers are also taking a tumble. For example, circuit specialist Cirrus Logic, Inc. (NASDAQ:CRUS) and chipmaker Broadcom Ltd (NASDAQ:AVGO) are both lower today, and options trading is accelerated on both stocks. Plus, CRUS and AVGO stocks are both testing notable levels on the charts. 

Put Players Pounce on CRUS Stock

Cirrus Logic put options are trading at three times the expected pace today, with put volume doubling call volume. This skew is due to heavy interest in the June 65 put, which is by far the most popular CRUS option today. Data suggests traders could be buying to open positions here, hoping to profit on a steeper drop in the shares. 

Looking back, put buying is certainly not the norm on CRUS stock. This is according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which shows a 50-day call/put volume ratio of 1.36 -- in the 75th annual percentile. In other words, calls have been bought to open over puts at a faster-than-usual clip.

Cirrus stock actually touched an all-time high of $71.97 on Friday, but the shares were last seen trading at $64.77, down 3.8% on the day. However, CRUS has found a foothold atop its 50-day moving average, a level that contained a pullback in mid-May. Plus, CRUS stock earlier bounced from a familiar level that aligns with a 50% Fibonacci retracement of its rally since February, and is now trading above a 38.2% Fibonacci retracement of this surge. 

cirrus logic stock

AVGO Stock Bounces From Key Level

In Broadcom's options pits, puts and calls are both trading at an accelerated pace, with roughly 25,000 contracts on the tape. In the lead is the June 240 call, and ISE data confirms some buy-to-open activity here, meaning traders are betting bullishly on AVGO stock ahead of expiration at the close on Friday, June 16. Also seeing heavy action is the longer-term October 230 put, but it looks like these options may be tied to stock.

Coming into today, short-term options traders have taken a slightly heavier-than-usual call-skewed approach. Broadcom has a Schaeffer's put/call open interest (SOIR) of 0.89, which ranks in the 44th annual percentile. Either way, now's a good time to buy near-term AVGO options, according to the stock's Schaeffer's Volatility Index (SVI) of 28%, which ranks in the 28th annual percentile. This suggests low volatility expectations are being priced into near-term options. 

On the charts, AVGO stock earlier bounced from from the $236.80 area, which is home to a 23.6% Fibonacci retracement of the stock's year-to-date rally, and the shares were last seen back atop the round $240 level, at $240.97. At the same time, Broadcom stock remains on pace for just its second close below its 20-day moving average since late April. 

broadcom stock


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI