WDC Wades Higher on Goldman Sachs Upgrade

Calls have been overwhelmingly popular in the options pits

Deputy Editor
Mar 5, 2021 at 10:39 AM
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The shares of Western Digital Corporation (NASDAQ:WDC) are up 4% at $66 at last check, after Goldman Sachs upgraded the stock to "buy" from "neutral," with a price-target hike to $85 from $56. The analyst in coverage cited increased demand for the company's computer memory technology, and its improved cost execution. 

On the charts, WDC has been cooling off from its March 1 two-year high of $72.98, though yesterday's steep 8.9% drop seems to have met potential support just above the $62 level. After consolidating below the $56 level until the end of January, WDC's February rally has brought it up 18.3% year-to-date. 

Today's upgrade has Goldman Sachs joining a bullish brokerage bunch, as ahead of today, 15 of the 20 analysts in coverage already carried a "buy" or better rating on Western Digital stock. Plus, the 12-month consensus price target of $69.86 is a 5.8% premium to current levels. 

Sentiment is similar in the options pits, per WDC's 50-day call/put volume ratio of 6.66 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all other readings from the past year, showing long calls being picked up at their fastest rate in the past 12 months. 

Today's trading looks a bit different, however. Puts are nearly pacing calls with 3,502 across the tape so far -- double the intraday amount. Most popular is the weekly 3/5 61-strike put, followed by the 64-strike call in the same weekly series. 

 

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