Analysts are weighing in on banking giant Citigroup Inc (NYSE:C), beverage behemoth The Coca-Cola Co (NYSE:KO), and biotechnology firm Heron Therapeutics Inc (NASDAQ:HRTX). Here's a quick roundup of today's bullish brokerage notes on C, KO, and HRTX.

• Goldman Sachs upgraded C to "buy" from "neutral," and raised its price target to $61 from $57, saying the market is lowballing the firm's return on earnings forecast. Separately, Citigroup Inc said it is closing the doors at Banamex USA -- its California-based Mexican banking subsidiary -- amid money-laundering accusations. Technically speaking, the stock has been chugging higher since hitting a 2015 low of $46.60 on Jan. 16, up 16%. More recently, though, this upside has stalled out in the $55-to-$55.50 region, with C closing at $54.08 on Friday. Option traders have taken the glass-half-empty approach in recent weeks, and at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.82 ranks in the 97th annual percentile.

• KO saw its rating raised to "outperform" from "market perform" and its price target bumped to $48 from $44 at BMO -- representing expected upside of 17.2% to last Friday's settlement at $40.96, and a trek into never-before-seen territory. As such, the blue chip is poised to follow the broader Dow into the green today. On the charts, KO has spent most of the past year bouncing between $39 and $45. Option traders have kept the faith, though, per the security's 10-day ISE/CBOE/PHLX call/put volume ratio of 5.21, which rests in the 73rd percentile of its annual range. Simply stated, calls have been bought to open over puts at a faster-than-usual clip.

• Leerink raised its price target on HRTX to $26 from $20 -- an area not seen since March 2010. The bullish brokerage note has shares of Heron Therapeutics Inc up 8% in electronic trading, and on their way to notch a new five-year high. This positive price action only echoes the stock's recent technical showing, with HRTX adding 60% on Friday, thanks to some well-received drug data and upbeat analyst attention -- and roughly doubling in value this year. Against this backdrop, it's not surprising to see the brokerage bunch in HRTX's corner. In fact, all four analysts covering the shares maintain a "strong buy" rating, while the average 12-month price target of $29.60 stands at a 50% premium to last week's settlement at $19.76.

The following is a reprint of the market commentary from the June 2015 edition of The Option Advisor, published on May 21. For more information or to subscribe to The Option Advisor, click here.

"Stocks end lower amid bond volatility," USA Today, May 12
"Rise in Long-Term Interest Rates Pushes Down Market," New York Times, May 12
"Bond market volatility unsettles stocks," Financial Times, May 12
"Stocks whipsawed by rising bond yields," Chicago Tribune, May 12

Equity benchmarks around the world experienced a patch of bumpy price action in mid-May, as a sell-off in German bunds spilled over into U.S. Treasuries. Yields on both instruments jumped as prices fell, and rattled investors dumped stocks in a hurry.

On May 12 -- a day that saw the S&P 500 Index (SPX) down 0.9% at its session lows, resulting in the Greek chorus of headlines above -- the CBOE 10-Year Treasury Note Yield Index (TNX) topped out at 23.35, its highest level in nearly six months.

Chances are, you're already familiar with this type of interplay between Treasury notes and stocks. When bond prices fall, yields rise -- which translates into increased borrowing costs. Not only do higher yields diminish the appeal of investing in equities, they also raise the threat of constricted corporate spending. As a result, a sudden or unexpected rise in yields can trigger equally sudden weakness in stocks.

However, a deeper dive into the data suggests there may be more to this relationship than occasional short-lived, knee-jerk jolts. Our senior quantitative analyst, Rocky White, examined the correlation between S&P performance and the spread between 2-year and 10-year Treasury notes. As the chart below clearly displays, the market crashes in 2000 and 2008 occurred shortly after the spread hit an extreme low.

As of May 15, the spread between these notes was about 165 basis points, with the 10-year yield at 2.228% and the 2-year yield at 0.580%, according to MarketQA. To put this in historical context, the table below breaks down yield spreads into five "brackets," each tallying the same number of returns -- with Bracket 1 including the narrowest spreads, and Bracket 5 the widest. Reviewing the data back to 2000, the current yield spread is in the third quintile -- on the high end of "average," as this metric goes.

You'll also notice a column displaying the corresponding 52-week S&P returns for each of these yield-spread ranges. Over the past 15 years, stocks have performed well when yield spreads are relatively wide. Brackets 4 and 5 both reflect substantially positive average and median 52-week S&P gains, with a preponderance of positive returns. On the other end of the spectrum, Brackets 1 and 2 show the benchmark index wavering between modest gains and notable losses, with the positive and negative returns closer to parity.

A more robust lending environment is perhaps the simplest explanation for this correlation between a wider yield spread and a stronger S&P. When spreads are wide, banks that borrow at short-term rates and lend at longer-term rates experience better lending margins -- and are thus more willing to lend, given the potentially increased profits from such lending activity. When borrowing needs are more likely to be met by lenders, new projects and expansion are more likely to occur, thereby contributing to earnings growth.

Based on this historical data, it would appear that Bracket 4 is the "sweet spot" for stocks -- which means we'd want to see the spread widen from here. In fact, the direction of this indicator may be just as relevant as the absolute reading. A yield spread that rises (or widens) from a low range can be viewed as bullish for stocks, while a declining (narrower) spread can be considered a potential red flag for an upcoming period of equity underperformance.

Meanwhile, from a technical analysis perspective, traders should take note of the 320-day moving averages for both TNX -- which, as you may have gathered, proxies the yield on 10-year notes -- and the iShares 20+ Year Treasury Bond ETF (TLT), which tracks the prices of long-term bonds. Peaks in TNX have been contained by its 320-day trendline since last summer, including the pop earlier this month. On the other hand, TLT is currently finding its footing at this moving average -- setting the stage for a possible repeat of TLT's April 2014 test of support at its 320-day, which preceded a substantial 10-month advance in the shares.

U.S. stocks kicked off the week on a high note, with the major indexes sitting in the black. In company news, today's stocks to watch include software giant Microsoft Corporation (NASDAQ:MSFT), as well as drugmakers Vascular Biogenics Ltd (NASDAQ:VBLT) and Celladon Corp (NASDAQ:CLDN). 

• MSFT announced its Windows 10 operating system will be available globally on Wednesday, July 29. Users of Windows 7 and 8.1 can upgrade to the new version for free. In early trading, Microsoft Corporation shares are 0.7% higher at $47.17, but have struggled longer term -- up less than 2% year-to-date. As such, options traders have been buying to open puts over calls at an accelerated clip in recent months. MSFT's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.73 ranks just 12 percentage points from a 12-month peak. Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.79 sits in the put-skewed 70th percentile of its annual range.
  


• VBLT is 7.3% higher at $8.64, thanks to encouraging trial results from its brain tumor drug, VB-111. From a relative-strength perspective, Vascular Biogenics Ltd has outperformed the broader S&P 500 Index (SPX) by 117 percentage points over the last 20 sessions, and is more than 47% higher year-to-date. Not surprisingly, all three analysts tracking the stock rate it a "strong buy," and VBLT's consensus 12-month price target of $13 stands in territory not charted since a mid-February bear gap.


• Finally, CLDN is looking for a strategic partnership or acquisition, following the disappointing performance of its heart drug in a mid-stage trial. The company also named Chief Financial Officer Paul Cleveland as its new CEO, after Krisztina Zsebo resigned from the post. These developments have the equity sitting 12.1% higher at $2.59. Longer term, though, Celladon Corp has performed terribly, shedding 86.7% of its value in 2015. On the sentiment front, each of the four brokerage firms following CLDN consider it a "hold," while its average 12-month price target of $2.33 is roughly in line with current trading levels.
  

Traders are rushing to ImmunoGen, Inc. (NASDAQ:IMGN) today, after the company announced its experimental ovarian cancer treatment appeared to have positive effects on patients in early testing. The shares have skyrocketed 63.7% to $14.70, and earlier hit an annual high of $14.75. Moreover, call volume is currently at 67 times the expected intraday pace, with the options making up eight of IMGN's 10 most active contracts.

The most popular option is the now in-the-money June 14 call, and data is suggesting buy-to-open activity. By purchasing the calls, traders are betting on extended gains above $14 before the contracts expire at the close on Friday, June 19.

This bullish bias is part of an ongoing trend in the stock's option pits. For example, IMGN's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio sat at 4.64 on May 12, but now registers at 34.37. This reading shows over 34 calls have been bought to open for every put during the past two weeks, and, what's more, it ranks higher than nearly four-fifths of similar readings from the past year.

The optimism in the stock's option pits coincides with its recent surge on the charts. Since touching a multi-year low of $5.34 on Dec. 23, IMGN has added over 175%. With today's gains, the shares are set to take out their 320-day moving average for the first time since March 2014.

Analysts, though, remain mostly skeptical. Of the 10 brokerage firms with coverage on ImmunoGen, Inc. (NASDAQ:IMGN), six say it's a "hold" or worse, while the average 12-month price target of $9.19 stands at a discount to current trading levels. However, it appears some analysts are beginning to change their tune. Specifically, Morgan Stanley upgraded IMGN to "equal weight" from "underweight," and doubled its price target to $10 from $5. Additionally, Canaccord Genuity and RBC raised their respective price targets to $20 and $15.

SINA Corp (NASDAQ:SINA) said its CEO is pouring $456 million in cash into the company, and as a result, the stock is soaring today. At last check, shares of SINA were up 23% at $50.06, and easily on track to close north of their 320-day moving average for the first time since March 2014. In the options pits, overall volume has jumped to 10 times what's typically seen at this point in the day, with traders split on the security's long- and short-term trajectory.

Call players have set their sights on the $50 mark, with possible buy-to-open activity detected at the June and January 2016 50 strikes. For those purchasing new positions, the goal is for SINA to extend its lead north of the round-number $50 level through the respective expiration dates. Amid today's rally, delta on the front-month strike has jumped to 0.50 from 0.039 at last Friday's close, while delta on the longer-term call has moved to 0.56 from 0.29.

Option bears, meanwhile, are scooping up SINA's weekly 6/5 46.50-strike put -- and it appears as if most of the action is being driven by buyers. If traders are indeed buying to open the puts, the expectation is for the equity to stage a quick retreat, and move south of the strike by Friday's close -- when the weekly series expires.

From a wider sentiment perspective, it's been call buyers who have been active in SINA's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 4.03 rests in the 82nd annual percentile.

Echoing this call-skewed bias is the security's Schaeffer's put/call open interest ratio (SOIR) of 0.48. Not only does this indicate that call open interest more than doubles put open interest among options with a shelf-life of three months or less, but it ranks lower than 92% of similar readings taken in the past year. Simply stated, speculative players have rarely been as call-heavy toward SINA Corp (NASDAQ:SINA) as they are now.

ITT Educational Services, Inc. (NYSE:ESI) is having a banner day, soaring 75% to trade at $4.22. Not surprisingly, the stock's options pits are hopping, with total intraday volume running at 23 times what's expected.

One of ESI's most active options is the June 3 call, and Trade-Alert confirms one speculator bought to open a sweep of 2,309 contracts for $0.45 apiece, minutes after the open. In other words, this traders paid a total of just over $100,000 (premium paid * number of contracts * 100 shares per contract), expecting the shares to topple $3.45 (strike plus premium) by June expiration. At the time of the trade, ESI was lingering near $2.56, and with the bid on this strike currently at $1.21, it looks like the early morning buyer has already made a healthy profit.

Shifting gears, short sellers have been keyed in on ESI for some time. Currently, three-fifths of the stock's float is sold short, representing more than six weeks of trading activity, at the average daily volume.

This bearish bias is understandable, given ITT Educational Services, Inc.'s (NYSE:ESI) woeful technical track record -- exacerbated by recent fraud charges. While the shares have surged today -- possibly on the firm's 2014 10-K filing -- they've surrendered 56% year-to-date, and earlier tested resistance at their 40-day moving average.

Analysts are weighing in today on smartphone concern BlackBerry Ltd (NASDAQ:BBRY), as well as semiconductor manufacturers Magnachip Semiconductor Corp (NYSE:MX), and Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). Here's a quick look at today's brokerage notes on BBRY, MX, and HIMX.

• There's plenty of buzz surrounding BBRY today, which is down 1.3% at $9.90, after a Morgan Stanley analyst reiterated his "underweight" rating and $7 price target, and said the company's 2016 forecast is "unattainable." This mirrors the general outlook on the Street, where 16 of 19 brokerage firms say the stock is a "hold" or worse. Not only that, but 16.9% of BlackBerry Ltd's float is sold short, representing almost 11 days of trading, at its normal volumes. This widespread pessimism is interesting, considering the shares have added over 30% in the past year. From a contrarian standpoint, this skepticism could benefit BBRY, if it can resume its long-term uptrend.


• Topeka Capital upgraded its rating on MX to "buy" from "hold" today, following the company's impressive showing in the earnings confessional. The stock is still trying to make up ground after its massive mid-February bear gap, but the shares have outperformed the S&P 500 Index (SPX) by nearly 14 percentage points in the past three months. Plus, they're soaring today, last seen 13.5% higher at $7.25. Put buying has still been more popular than normal in recent months. Magnachip Semiconductor Corp's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.28 is higher than more than three-fourths of readings from the past year.


• HIMX is 4.8% lower today at $6.22, with a downgrade to "sell" from "neutral" -- and price-target cut to $4 from $5 -- at Chardan Capital weighing on the shares. Specifically, the brokerage firm said Samsung could possibly migrate from HIMX LCD display drivers to AMOLED displays. Even before today, the equity was 19% below its year-to-date breakeven level, and short sellers have been piling on. Short interest increased 52.8% during the two most recent reporting periods, and it would now take over four days to buy back all the shorted shares, at Himax Technologies, Inc.'s average daily volumes. Things are more bullish in HIMX's options pits, though. During the past 50 days at the ISE, CBOE, and PHLX, over 17,000 calls have been bought to open, versus fewer than 400 puts.

QUALCOMM, Inc. (NASDAQ:QCOM) is flat today at $70.60, but that hasn't stopped option bulls. More than 38,000 calls have crossed so far -- twice the expected intraday amount -- versus only 5,000 puts. The most popular contracts are the weekly 5/29 70.50- and 71-strike calls, which appear to be seeing buy-to-open action. This means traders are betting on extended gains above the respective strikes, ahead of the contracts' expiration at today's close.

This is just more of the same for QCOM traders, as call buying has been hot lately. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 6.25 is only 1 percentage point from an annual high.

The majority of brokerage firms have also taken a bullish stance. That is, 15 of 24 analysts tracking QCOM say it's a "buy" or better, versus nine "holds" and not a single "sell."

QUALCOMM, Inc. (NASDAQ:QCOM) hasn't really lived up to the hype, though. The shares have given back over 12% in the past year, and more recently have been pressured lower by their descending 40-week moving average. The company is also facing increased competition, due to yesterday's big buyout.

Eli Lilly and Co (NYSE:LLY) topped out at a 13-year high of $79.55 earlier -- and was last seen up 3.5% at $79.06 -- on reports the company is joining forces with AstraZeneca plc (ADR) (NYSE:AZN) to combine two of their respective cancer treatments for a new clinical trial. Option traders are responding in kind, scooping up calls at eight times the average intraday pace -- with a number of speculators betting on higher highs in the next few weeks.

Specifically, LLY's June 80 call has seen the most action, and it seems safe to assume new positions are being purchased here. By initiating the long calls, traders are gambling on LLY to break through the round-number $80 mark -- a feat not accomplished since early 2002 -- by the close on Friday, June 19, when front-month options expire.

From a broader perspective, today's accelerated call volume just echoes the withstanding trend seen in LLY's options pits. In fact, the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.11 ranks in the 86th percentile of its annual range.

Technically speaking, Eli Lilly and Co (NYSE:LLY) has put in a strong performance over the long term -- up 32% year-over-year, thanks to several sharp bounces off its 120-day moving average. More recently, the shares have outperformed the broader S&P 500 Index (SPX) by 7 percentage points over the past three months.

Insurance issue Humana Inc (NYSE:HUM) skyrocketed in early afternoon trading -- and was temporarily halted -- thanks to reports the company could receive a buyout offer from one of its peers, possibly Aetna Inc (NYSE:AET) or CIGNA Corporation (NYSE:CI), soon. After topping out at an all-time high of $219.79, HUM was last seen 20.4% higher at $214.60, and it looks like at least one short-term bull is about to bank. 

HUM calls have now traded at four times the average intraday clip, and have roughly doubled put volume thus far. The security's 30-day at-the-money implied volatility edged 10.1% higher to 38.4% -- which puts it in the 100th percentile of its annual range.

Digging deeper, it looks like one prophetic trader rolled the dice just in time to capitalize on HUM's rally. At 1:10 PM ET -- when HUM was trading around $177 -- several blocks of 5/29 180-strike calls were presumably bought to open across a number of exchanges. The calls were bought for $0.25 apiece, making breakeven ahead of tonight's expiration $180.25 (strike plus premium paid). Within 10 minutes, HUM was well north of $200.

Since the takeover rumors emerged, HUM's longer-term options have drawn interest. It looks like some traders may be liquidating their now deep-in-the-money August 175 calls, while others are initiating fresh positions at the weekly 6/5 210-strike call, to gamble on an extended rally north of the strike through next Friday's close, when the options expire.

Prior to today, HUM puts were the options of choice. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.15 stands higher than 73% of all other readings from the past year, pointing to a healthier-than-usual appetite for bearish bets of late. 

Echoing that, Humana Inc's (NYSE:HUM) Schaeffer's put/call open interest ratio (SOIR) is docked at 2.78, suggesting short-term puts outnumber their call counterparts by a nearly 3-to-1 margin. What's more, this ratio sits in the 99th percentile of its annual range, showing that near-term traders have rarely been more put-biased during the past year. 

Biotech stocks have been red hot lately, and today is no exception. Two names within that sector seeing sizable upside this afternoon -- and attracting attention from option bulls -- are ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA).

ACAD is up 3.3% at $41.50 -- after taking a bounce off its 10-day moving average -- and now sports a year-to-date lead to 31%. Meanwhile, the security's calls are flying off the shelves at triple the expected intraday rate and 22 times the pace of puts. Digging deeper, traders are buying to open ACAD's in-the-money July 40 call, anticipating additional upside through the close on Friday, July 17, when back-month options expire.

Today's bullish bias is business as usual for the drugmaker. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than eight ACAD calls have been bought to open for every put. The resultant call/put volume ratio of 8.43 ranks in the top one-third of comparable readings from the last year.

Shifting our focus to ARIA, the shares are up 2.1% at $9.19, and currently sport a year-to-date advance of almost 34%. Calls are being exchanged at triple the normal intraday clip, powered largely by activity at the July 10 strike. By buying to open these out-of-the-money calls, traders expect ARIA to muscle into double-digit territory -- for the first time since October 2013 -- by back-month expiration.

Unlike ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) has seen puts bought to open at a faster-than-usual rate recently. The latter's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.19 checks in higher than 77% of comparable readings from the previous year.

The tech sphere is buzzing with new developments today, including Amazon.com, Inc.'s (NASDAQ:AMZN) announcement that it will once again be expanding its same-day delivery service to certain Prime members, and reports that the company is in talks to develop its own line of food and household products. The headlines have AMZN trading higher, and eleventh-hour option players eyeing more upside through tonight's close.

Taking a quick step back, calls are trading at 1.4 times the average intraday pace. Weekly 5/29 options are in focus, with nine of AMZN's 10 most active strikes residing in this series. The stock's weekly 5/29 430-strike call has seen the most action, and according to the International Securities Exchange (ISE), there appears to be a mix of buy- and sell-to-open activity occurring here.

By purchasing new positions, traders expect AMZN to rally north of the strike by tonight's closing bell -- when the series expires. Meanwhile, by writing the calls to open, the goal is for the security to settle the week south of the strike. Earlier, AMZN hit an intraday high of $432.50, but hasn't closed north of $430 on a weekly basis since the first full week of May.

That's not to say AMZN hasn't been making technical inroads this year -- tacking on 38.4% to trade at $429.35. Meanwhile, in the options pits, call buying has been picking up speed in recent weeks. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Amazon.com, Inc.'s (NASDAQ:AMZN) 10-day call/put volume ratio of 1.32 ranks in the 73rd annual percentile.