2 Chip Stocks Near December Highs Amid Bull Notes

Both stocks rallied through November to hit mid-December highs

Deputy Editor
Dec 28, 2020 at 11:20 AM
facebook twitter linkedin

The semiconductor sector is in the spotlight today, after Mizuho dealt out a round of bull notes in the form of price-target hikes. The firm chimed in on 15 semiconductor and chip stocks, citing strong growth prospects in 2021. Honing in, two of those stocks, Applied Materials Inc (NASDAQ:AMAT) and Micron Technology Inc (NASDAQ:MU), are worthy of a closer examination.

AMAT is down 0.4% at $85.02 at last check, even after Mizuho upped its price target to $96 from $82. The stock has dipped slightly since mid-December, but is still not too far from its Dec. 15 all-time high of $90.60, with recent pullbacks caught by the $84 level. Today's earlier highs, however, were met with resistance from the 10- and 20-day moving averages -- both former trendlines of support during the stock's recent run to record highs. 

Though analysts are leaning bullish on Applied Materials stock, there is still some room for upgrades. Of the 17 analysts in coverage, 11 sport a "buy" or better rating, with six a lukewarm "hold." Meanwhile, the 12-month consensus price target of $89.28 coming into today is a 5% premium to current levels. 

Now turning to Micron Technology stock, the equity is seeing a modest gain -- up 1.3% at $71.53 at last check -- after Mizuho hiked its price target to $85 from $75. MU's chart layout is similar, with a November surge culminating in a Dec. 9 all-time high of $74.60. However, the $74 region has kept a ceiling on multiple attempts at a breakout. 

In the options pits, MU is seeing an overwhelming preference for calls. The stock's 50-day call/put volume ratio of 3.80 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than all other annual readings, meaning long calls are more popular than they have been in the last 12 months.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Stock Pick Report


Special Offers from Schaeffer's Trading Partners