Activision Blizzard shares could hit record highs in February
Activision Blizzard, Inc. (NASDAQ:ATVI) has had a solid start to the new year, boosted by the inaugural season of the Overwatch League. If past is precedent, ATVI could have even more room to run in the short term. Heading into Super Bowl weekend and a new month, we looked at the video game stock throwing up two significant "buy" signals.
ATVI Stock Historically Hot After Super Bowl
According to Schaeffer's Senior Quantitative Analyst Rocky White, Activision Blizzard is the best S&P 500 stock to own the week after the Super Bowl, going by average return. Going back 10 years, ATVI stock sports an average return of 6.14% the week after the Super Bowl, and was positive 80% of the time. A move of similar magnitude next week -- which includes Activision's earnings release on Thursday, Feb. 8 -- would have ATVI soaring past the $75 threshold to a new record high.
ATVI a Top February Performer
Furthermore, ATVI stock is one of the best 25 stocks to own in February. Over the past 10 years, the shares have ended the month higher seven times, averaging a gain of 7.28%. A similar rally would have the security trading around $76.51 to start March.
After touching a record high of $72.68 yesterday, ATVI stock is down 1.5% to trade at $71.32 today, due to broad-market headwinds. However, today's pullback is being contained by the shares' rising 10-day moving average, which has guided the security higher since the new year. The equity has tacked on 12.8% in 2018, and an impressive 79% year-over-year.
In the options pits, trader sentiment is unsurprisingly bullish, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing ATVI's 10-day call/put volume ratio of 2.73, ranking in the 83rd percentile of its annual range. This indicates that calls have been bought over puts at a much faster-than-usual pace over the past two weeks.
Those looking to buy ATVI options must pay up, however. The stock's 30-day at-the-money IV of 43.5% ranks in the 99th annual percentile -- meaning short-term premium is more expensive than usual, historically speaking.