Speculators Anticipate Extended Rally for Cirrus Logic, Inc. (CRUS)

Cirrus Logic, Inc. (CRUS) reports earnings after the close Wednesday


Published on Jan 26, 2015 at 1:59 PM
Updated on Apr 20, 2015 at 5:32 PM

Cirrus Logic, Inc. (NASDAQ:CRUS) hit an annual high of $26.13 earlier, and was last seen up 3.1% at $25.85. Activity has picked up in the stock's options pits, where traders are betting on a positive move for CRUS following its earnings report, scheduled for after the close Wednesday.

Specifically, calls are trading at three times the rate typically seen at this point in the day, with the weekly 1/30 25 strike leading the way. In fact, three times as many contracts have crossed at this strike compared to the next closest. Data suggests mostly buy-to-open activity here, meaning speculators expect CRUS to extend today's rally through this Friday's close, when the contracts expire.

This preference for call buying is nothing new in the equity's options pits. CRUS' 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.39 is higher than 87% of all similar readings from the past year.

With today's price action, Cirrus Logic, Inc. (NASDAQ:CRUS) has drawn closer to its consensus 12-month price target of $26.67. Also, despite the stock's impressive 31.8% year-over-year gain, 60% of covering analysts maintain tepid "hold" ratings. Should CRUS continue its success on the charts, a round of price-target hikes and/or analyst upgrades could send the shares even higher.

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