Bull Notes Help ADI and NVDA Stocks Overcome Trade Headwinds

M&A buzz could also be helping Nvidia

by Josh Selway

Published on Dec 13, 2019 at 10:36 AM

Analog Devices, Inc. (NASDAQ:ADI) and Nvidia Corporation (NASDAQ:NVDA) are both in focus this morning due to confusion about whether there's actually be legitimate progress in U.S.-China trade relations. As such, the shares are struggling to capitalize on price-target hikes out of SunTrust Robinson, which sees chip stocks ADI and NVDA going much higher.

For ADI, the brokerage firm lifted its price target to $141 from $133, a level that represents all-time-high territory. The equity yesterday grabbed its highest close since July after recently jumping from the 200-day moving average, and was last seen up 0.3% at $118.20.

Short-term options traders are heavily put-skewed right now on Analog Devices. For instance, the Schaeffer's put/call open interest ratio (SOIR) comes in at 1.38, in the 100th annual percentile, showing such a preference for short-term puts is rare.

As for NVDA, the shares have managed to overcome an early dip to hit a fresh annual high of $226.98, up 0.8% on the day. SunTrust set a $273 price target on the GPU specialist, a $33 increase from its previous target and territory not touched since October 2018. Part of today's upside for Nvidia could be due to news the company is offering no concessions to European Union (EU) regulators for its Mellanox Technologies purchase.

Nvidia options traders have remained focused on calls, including this morning's trading, with the contracts already crossing at three times the expected pace. The weekly 12/13 225- and 227.50-strike call are most popular, where last-minute traders are opening positions ahead of expiration at today's close.


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