Chip Stock Surges to Record Highs After Bull Note

Options volume is running at 4 times the intraday average

Digital Content Manager
Oct 26, 2021 at 10:46 AM
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The shares of Nvidia Corporation (NASDAQ:NVDA) are up 7.9% to trade at an all-time high of $250.05 this morning, after the semiconductor name received a price-target hike from Piper Sandler to $260 from $225. This bull note came after the firm's web scraping analysis, ahead of the Nvidia's third-quarter earnings report, which is due out after the close on Wednesday, Nov. 17. The analyst in coverage sees a strong holiday quarter ahead, even with supply chain constraints.

Of the 26 analysts in question, 24 carry a "buy" or better rating. Meanwhile, the equity's 12-month consensus target price of $233.12 is a 5.5% discount to current levels, indicating additional price-target hikes could be in store. 

Today's pop has placed the security firmly above recent overhead pressure at the $230 level, which had been keeping a tight lid on shares since August. Year-to-date, the equity has added 88.7%.

An unwinding of pessimism over in the options pits could fuel additional tailwinds for NVDA. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.21 sits higher than 92% of readings from the past year, indicating short-term options traders have rarely been more put-biased. 

This shift could be already underway. So far today, 262,000 calls and 72,000 puts have crossed the tape, which is four times the intraday average. Most popular is the weekly 10/29 245-strike call, followed by the 250-strike call in the same series, with positions being opened at both.

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