The company posted a positive second-quarter report
The shares of blue-chip IBM (NYSE:IBM) are up 2.9% at $130.18 at last check, after the company reported a positive second-quarter report. The company's revenue and earnings both exceeded analyst expectations, after which, no fewer than five analysts hiked up their price targets -- including Citigroup to $140. Furthermore, the company announced a strategic partnership with Adobe (ADBE) and Red Hat, which focuses on data-driven marketing.
Today's rise has IBM challenging pressure at the 320-day moving average. Above the $130 region for the first time since mid-June, the equity has added 10% over the past three months, and is eyeing its eighth straight close higher.
Analysts came into today hesitant on IBM, with four out of the 11 in coverage at a "strong buy" and the remaining seven at a "hold." Meanwhile, the 12-month consensus target price of $131.56 is slightly above current levels, making this morning's price-target hikes less of a surprise.
Today's positive report is attracting options traders, with 67,000 calls and 37,000 puts across the tape so far -- 10 times the usual daily volume. Most popular is the weekly 7/24 130-strike call, expiring at the end of this week, where new positions are being opened.
Options may not be a bad way to go at the moment, either, as IBM is seeing attractively priced premiums. The stock's Schaeffer's Volatility Index (SVI) of 34% stands higher than 23% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment.