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Wall Street Begins to Bet on Activision Blizzard Breakout

Many traders holding call options in the September series on ATVI could be cheering

Sep 4, 2019 at 10:22 AM
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Activision Blizzard, Inc. (NASDAQ:ATVI) has been trying to gain its footing on the charts after a lackluster first half of the year, and some analysts see upside coming soon. Just this morning BMO raised its opinion on the stock to "outperform" from "market perform," and boosted its price target to $60 from $43. The brokerage's note discussed the video game company's restructuring efforts, saying they could spark improved financial performance. BMO is also bullish on the upcoming "Call of Duty: Modern Warfare" game, as it raised its sales projection.

This has the shares trading up 4.7% today at $53.49, pacing for their best close of 2019. ATVI is also now within 3 points of the 320-day moving average, one of our favorite long-term trendlines to monitor. In the options pits, Activision Blizzard calls had already been seeing increased interest, and there's notable open interest at the front-month September 52.50 call. Data confirms almost exclusive buy-to-open activity here, so these bulls should be enjoying today's price action.

Another name that received positive analyst attention this morning was Sonos Inc (NASDAQ:SONO). Jefferies upped its price target to $16 from $12, saying the company's IKEA partnership should help it attract more casual consumers. SONO shares were last seen up 1.4% at $14.32, bringing their year-to-date lead to 46%.

Traders at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been hammering long calls in recent weeks, too. In fact, more than 24,000 calls have been bought to open in the past 10 days, compared to fewer than 700 puts. As for other analysts, there are only five in coverage, and three of them recommend buying the stock.


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