Sony Stock Signal Flashes During Breakout

Options traders are pricing in low volatility expectations for near-term contracts

Sep 12, 2019 at 2:15 PM
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Sony Corp (NYSE:SNE) has been hot on the charts, today eyeing its best close since almost a year. The shares were last seen at $60.32, putting their year-to-date gain at roughly 25%, and our internal data suggests SNE could keep pushing higher.

Specifically, a study from our Senior Quantitative Analyst Rocky White pegged Sony as a name that could benefit from a combination of low volatility expectations and a stock price near 52-week highs. The low volatility expectations are measured by the Schaeffer's Volatility Index (SVI), which for SNE is 26%, ranking in the 15th annual percentile. The equity has actually flashed seven similar signals of this type within the past five years, and the average one-month return has been greater than 7%.

Those who have been picking up options have preferred calls, based on the fact that peak open interest of almost 26,000 contracts sits at the October 60 call. Next closest is the October 65 call, where 11,000 contracts are open, and the 57.50 call from the same series is close behind. Overall, call open interest rests in the 96th annual percentile.

Analysts are behind the stock, with 80% in coverage handing out "strong buy" recommendations. Similarly, the average 12-month price target is up at $67.13, up from $59.90 back in April.

sne stock chart sept 12




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