NPTN Stock Jumps on Bull Note

NeoPhotonics Corp (NYSE:NPTN) shares are rallying this morning, last seen 8.9% higher at $9.34, thanks to an upgrade out of Needham. The brokerage firm upgraded its view on the transmitter producer to "buy" from "hold," and set an $11 price target, saying among other things that the rollout of 5G technology could help the company this year.

Options activity has actually been exceedingly bearish on NPTN for some time. Data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 50-day put/call volume ratio of 4.88, which ranks in the 99th annual percentile, showing unusual demand for long puts over calls in the past 10 weeks. This bearish setup is also confirmed by the Schaeffer's put/call open interest ratio (SOIR) of 1.70, which ranks in the 94th annual percentile.

This comes after the equity has made a major move up the charts in the past half-year, adding over 80% in the past six months. More recently, NeoPhotonics has found strong support from the 50-day moving average, a trendline that also contained pullbacks back in September and October. At their current perch, NPTN shares are not far from their Jan. 9 peak of $9.46.