This Chip Stock Could Surge Into February

MU calls have been much more popular than puts

Managing Editor
Jan 11, 2018 at 3:03 PM
facebook twitter linkedin


Chip makers have been in focus to start the new year, after Intel's (INTC) reported Spectre security flaws. Fellow chipmaker Micron Technology, Inc. (NASDAQ:MU) has also struggled lately, on track to shed 8.4% this week. However, this pullback puts MU stock within one standard deviation of its 80-day moving average, a trendline with historically bullish implications.

According to Schaeffer's Senior Quantitative Analyst Rocky White, following the last three pullbacks to the 80-day moving average in the past three years, the semiconductor name was up an average 9.47% one month later, and higher two out of the three times. Micron was last seen down 0.7% to trade at $43.06.

Pullbacks MU

In the options pits, the attitude remains overwhelmingly bullish. That is, the equity has a 10-day call/put volume ratio of 4.58 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), meaning call buying has outnumbered put buying by a more than four-to-one ratio.

Digging deeper, the weekly 2/23 49-strike call saw one of the largest increases in open interest during this time. According to the major options exchanges, the predominant activity at this strike was of the buy-to-open kind, indicating options traders are banking on Micron stock to resume its quest for fresh highs in the coming months. 

Make the Most of the next Expiration Week Countdown!


 




 
Special Offers from Schaeffer's Trading Partners