Call Players Pounce as Oversold Himax Technologies, Inc. (HIMX) Snaps Back

Intraday call volume has ballooned on Himax Technologies, Inc. (ADR) (HIMX)

Dec 15, 2016 at 1:56 PM
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Semiconductor stock Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) has made some sharp moves on the charts today, after brokerage firm Nomura cut its price target to $7.70 from $9. While HIMX fell to an annual low of $5.97 earlier, it has pared its losses, last seen down 0.1% at $6.45. In the meantime, options traders are placing bets at an accelerated clip, with calls being exchanged at 12 times the intraday norm. 

At last check, more than 14,000 HIMX call options have been traded, compared to fewer than 5,000 puts. This overwhelming call-skew is due to heavy attention at HIMX's January 2017 6-strike call, the most popular option overall by a long shot. While it's not exactly clear how traders are positioning themselves, anyone buying to open the in-the-money option is betting on the shares moving higher over the next month or so. 

HIMX option traders have long preferred calls over puts. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows call buying nearly tripling put buying during the past 10 sessions. Plus, the stock's Schaeffer's put/call open interest ratio (SOIR) is 0.62, meaning call open interest outweighs put open interest among options expiring within three months. 

No matter if it's calls or puts, now looks to be an opportune time to buy premium on near-term HIMX options. The stock sports a Schaeffer's Volatility Index (SVI) of 53%, which ranks below 85% of all other readings from the past year. Said differently, the options market is currently pricing in low volatility expectations for short-term options. 

Elsewhere, sentiment is mixed on HIMX stock. Short interest is elevated, according to HIMX's short-interest ratio of 8.70, suggesting almost nine days' worth of buying power is sold short, judging by average daily volumes. At the same time, this indicator has fallen sharply since peaking at an all-time high in October. Separately, 60% of analysts rate the stock a "strong buy," with no "sell" ratings to be found. 

However, a look at Himax Technologies, Inc.'s (ADR) (NASDAQ:HIMX) chart suggests today's bearish note from Nomura may not be the last of its kind from the analyst community. While HIMX remains above the $6 level that's served as support since mid-2014, the stock has struggled mightily since its annual high of $12 back in March. In fact, its 14-day Relative Strength Index (RSI) was docked at 25 as of last night's close, meaning the stock has been oversold, and could be due for a bounce. 

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