Put Buying Has Picked Up on UTX Stock

UTX has been choppy on the charts since April

Oct 3, 2019 at 9:56 AM
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United Technologies Corporation (NYSE:UTX) is trading up 0.9% in early action at $131.70, thanks to a note from Credit Suisse which started coverage on the stock with an "outperform" rating and $164 price target -- representing almost 26% upside to Wednesday's close. While the shares sport a solid year-to-date lead of 22.5%, they've been rather choppy on the charts since a May 1 high of $144.40, with the low $120 area containing all pullbacks. Today's price action has the equity just below the 50-day moving average, but recent options traders may be hoping for a quick reversal.

That's because the 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 1.35 and ranks in the 90th annual percentile. This shows very unusual demand for long puts recently, which is somewhat interesting since the Schaeffer's put/call open interest ratio (SOIR) of 0.45 shows call open interest still more than doubles put open interest among contracts expiring within three months.

On the whole, Wall Street has remained bullish on the Dow component, There are 13 brokerage firms in coverage on UTX, and nine of them sport "strong buy" recommendations. The average 12-month price target confirms this bullish bias, since it stands up at $154.07. On the other hand, some short sellers have been moving in, with short interest increasing by 6.5% in the last two reporting periods -- though this still leaves short interest at a minuscule 0.8% of the total float.

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