Activision, Inc. (ATVI) Bulls Look to Profit as Shares Near All-Time High

Activision Blizzard, Inc. (ATVI) is surging higher after earnings

May 7, 2015 at 11:12 AM
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Video game creator Activision Blizzard, Inc. (NASDAQ:ATVI) is moving higher today, after the company posted strong first-quarter numbers and raised its full-year guidance. In response, no fewer than seven brokerage firms raised their price targets on the stock. Meanwhile, options volume is soaring -- especially on the call side, where contracts are running at 14 times the expected intraday pace. ATVI's most popular contract is the June 24 call, and it looks like traders are buying it to open, expecting additional gains above $24 before the contracts expire at the close on Friday, June 19.

It's unlike ATVI's speculators to be targeting calls, at least judging by their activity during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Across these exchanges, the security as accumulated a 10-day put/call volume ratio of 0.35, which ranks higher than two-thirds of similar readings from the past year. In other words, put buying has been more popular than usual of late.

Furthermore, the stock has a Schaeffer's put/call open interest ratio (SOIR) of 0.63, which is higher than 87% of readings from the past 12 months. This tells us that ATVI's short-term speculators have been more put-skewed than normal.

On the charts, Activision Blizzard, Inc. (NASDAQ:ATVI) has been a standout, Since its 2015 low of $18.43 on January 13, the equity has added 30.8%, with the shares 3.9% higher today at $24.10 -- just a chip-shot away from their all-time high of $24.18, touched last September. If ATVI can continue its trek north on the charts, there may be a shift in speculator sentiment, providing a boost to the shares.


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