Spotify Stock Eyes Best Day of 2021 Amid Fresh Coverage

There is still plenty of pessimism left to be unwound

Deputy Editor
Apr 23, 2021 at 10:38 AM
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The shares of Spotify Inc (NYSE:SPOT) are up 7.8% to trade at $285.87, on track for its best single-session gain since Dec. 2, after Jefferies initiated coverage with a "buy" rating and lofty $360 price target. The firm sees the stock as undervalued, and views it as "more platform than streaming service."

Today's pop has the equity continuing its bounce off the $260 level. Overhead though, the 60-day moving average halted SPOT's recent breakout attempt at the $300 level -- an area of former resistance in 2020 that temporarily served as short-term support earlier in 2021.  Year-to-date, the stock is still down 12.1%. 

Ahead of today's fresh coverage, the brokerage bunch was perfectly split on Spotify stock, leaving plenty of room for a round of upgrades. Of the 20 in coverage, 10 carried a "buy" or better rating on the security, with the remaining 10 a "hold" or worse. 

There's plenty of pessimism to unwind in the options pits as well. SPOT's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 85% of readings in its annual range, showing long puts being picked up at a faster-than-usual clip. 

Today, that sentiment appears to be shifting. So far, 5,579 calls and 1,150 puts have crossed the tape, with calls running at seven times what's typically seen at this point. The weekly 4/23 280-strike call is the most popular, where new positions are being opened. This shows plenty of traders betting on more upside for SPOT by the contract's expiration at the end of today. 

 

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