Activision Blizzard Stock Ripe for a Bullish Options Trade

ATVI tends to outperform in July

Jun 29, 2018 at 10:43 AM
facebook X logo linkedin

Activision Blizzard, Inc. (NASDAQ:ATVI) came within a chip-shot of notching a record high earlier this month, extending a mid-May bounce off its 200-day moving average. The shares have more recently consolidated near another trendline that's had bullish implications in the past, suggesting ATVI could be headed on its next leg higher.

Specifically, the pullback has the shares trading near their 40-day moving average, which has been ushering ATVI higher since early May. According to Schaeffer's Senior Quantitative Analyst Rocky White, the last 13 times the equity has come within one standard deviation of this trendline after a lengthy stint above it have resulted in an average one-month gain of 3.93%, with 77% of those returns positive.

atvi stock price chart on june 29

At last check, ATVI stock was trading up 1.5% at $77.17, so another move of this magnitude would put the shares above $80 -- and north of their March 12 all-time peak of $79.63. Increasing the equity's chances of a near-term rally are the potential for seasonal tailwinds. Activision Blizzard has been one of the best stocks to own in July over the past 10 years, averaging a monthly return of 5.28%, and boasting a 90% win rate.

There's certainly room for analysts to upwardly revise their ratings on a stock that's already up 21.8% year-to-date. While five of the 22 covering brokerages still maintain a tepid "hold" rating on ATVI, the average 12-month price target of $77.62 stands in line with current levels. In fact, today's gains are possibly the result of an earlier price-target hike to $88 from $76 from UBS.

Those wanting to bet on more upside for Activision Blizzard stock may want to consider options. The equity's Schaeffer's Volatility Index (SVI) of 27% ranks in the 11th annual percentile, indicating short-term options are pricing in relatively low volatility expectations -- a boon to potential premium buyers.


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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI