Dell Stock Hits Record High After Bernstein Upgrade

Options bulls are blasting the security in response

Deputy Editor
Jan 10, 2022 at 10:25 AM
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Dell Technologies Inc (NYSE:DELL) is up 1.6% at $58.91 this morning, and earlier notched an all-time high of $59.70, following an upgrade from Bernstein to "outperform" from "market perform." The analyst also hiked its price objective to $72 from $63, citing Dell's six-week backlog in its PC business, which is paired with an impressive array of commercial versus consumer business.

Dell stock has put up some serious numbers year-over-year, adding more than 50% in that time frame. The 150-day moving average caught a pullback in September, while the $53 area caught subsequent dips in November and December. Plus, DELL has already managed to add 5.1% in 2022.

The majority of analysts are bullish towards DELL, even after Evercore ISI downgraded the equity around a month ago. Still, there is room for improvements, as three of the 12 in coverage recommend a tepid "hold," versus nine "buy" or better ratings. What's more, the 12-month consensus price target of $68.77 is an 17% premium to current levels. 

DELL's typically quiet options pits are bursting with bullish activity today. Already, 2,409 calls have exchanged hands, which is five times the intraday average. Most popular are the January 60 and 65 calls. 

A broader look shows the options pits have been optimistic for a while. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 4.94 calls have been picked up for every put in the past 10 weeks. This ratio stands higher than all other readings from the last year, indicating a ravenous appetite for calls of late. 

Now looks like a good time to weigh in on the security's next move with options, given Dell stock is seeing attractively priced premiums at the moment. This is per the equity's Schaeffer's Volatility Index (SVI) of 24%, which stands in the 18th percentile of its annual range. What's more, DELL's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 80 out of 100. In other words, the security has exceeded options traders' volatility expectations over the past year.

 

 

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