Adobe Stock Scores Fresh Record on Acquisition Buzz

Both Baird and Stifel raised their price targets on ADBE earlier

Digital Content Manager
Aug 20, 2021 at 10:34 AM
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The shares of Adobe Inc (NASDAQ:ADBE) are up 1.6% to trade at an all-time high of $647.61 at last check, after the company announced it will acquire video software name Frame.io in a $1.27 billion deal. The acquisition, which is expected to close in the fourth quarter, will expand Adobe creative cloud's video editing capabilities. In turn, the security earned price-target hikes from Baird and Stifel earlier, to $750 from $675, respectively.

Digging deeper, Adobe stock has been carving a channel of higher highs since June. The 20-day moving average has been a consistent source of support for the security throughout this rally, containing multiple pullbacks along the way. Longer term, ADBE sports a healthy 34.8% year-over-year lead.

A sentiment shift in the options pits could push shares even higher. This is per ADBE's Schaeffer's put/call volume ratio of 1.36 (SOIR), which sits higher than 96% of readings in its annual range. This indicates short-term traders have rarely been more put-biased.

Now looks like a great opportunity time to weigh in on Adobe stock's next move with options. The equity's Schaeffer’s Volatility Index (SVI) of 24% sits higher than 11% of readings from the past 12 months. Plus, its Schaeffer's Volatility Scorecard (SVS) stands at 75 out of 100, indicating the equity has exceeded options traders' volatility expectations over the past year -- a boon for buyers.

A look at today's trading shows 4,354 calls and 4,050 puts exchanged so far -- double the intraday average. The August 645 call, followed by the 650 call in the same monthly series are the most popular. Both contracts expire this evening. 

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