Bulls Rush Ambarella, Inc. (AMBA)

Ambarella Inc (AMBA) is up 4% today, sparking accelerated option activity

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Published on Feb 24, 2015 at 1:27 PM
Updated on Apr 20, 2015 at 5:32 PM

Ambarella Inc (NASDAQ:AMBA) is 4.1% higher today at $57.18, on what some are calling a possible short squeeze. Whatever the catalyst, bullish speculators have stepped up, with calls trading at nearly twice the normal intraday pace. One option seeing notable action is the weekly 2/27 60-strike call. It appears some buy-to-open activity has taken place here, with traders betting on AMBA to eclipse $60 by the end of the week, when the contracts expire.

Today's call buying is just more of the same for AMBA speculators. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.61 ranks higher than 80% of all readings from the past year. However, with one-third of the equity's float sold short -- accounting for seven sessions' worth of trading, at normal daily volumes -- some of this call buying could be short sellers looking for a hedge.

Elsewhere, analysts are split on the stock. Five covering brokerage firms call AMBA a "hold" or worse, while four others deem it a "strong buy."

On the charts, Ambarella Inc (NASDAQ:AMBA) recently bounced off its 20-week moving average. In the past 52 weeks, the shares have added roughly 84%. Off the charts, the company this morning confirmed that it will report fourth-quarter earnings next Tuesday, March 3.


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