Dell Technologies Stock Bounces on Bull Note

DELL options traders have remained bullish, despite the stock's recent drop

Managing Editor
Jun 20, 2019 at 9:52 AM
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Computer maker Dell Technologies Inc (NYSE:DELL) is climbing the charts this morning, last seen up 4.3% at $55.72, after Deutsche Bank initiated coverage with a "buy" rating and $62 price target on the stock. The brokerage firm said it believes DELL could stave off industry headwinds, and might benefit from refinancing opportunities in the event of lower interest rates.

Today's fresh bull note is much of the same for Dell stock, with seven of the 10 covering analysts already sporting a "buy" or "strong buy" rating. Plus, DELL's average 12-month price target comes in at a lofty $72.54 -- representing 35% upside to Wednesday's close.

Looking at options, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows that eight calls have been bought for every put over the past two weeks on DELL. Echoing that, DELL's Schaeffer's put/call open interest ratio (SOIR) of 0.31 indicates that call open interest roughly triples put open interest among options expiring in the next three months.

From a technical standpoint, the optimism among analysts and options traders is rather surprising given DELL's performance of late. Following a successful climb to its record peak of $70.55 on May 17, the stock fell more than 20%, mostly due to a post-earnings bear gap on May 31. Today, however, the equity is knocking on the door of its 200-day moving average, which hasn't been topped on a daily closing basis since June 4.

 

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