Software Stock Overdue for Bull Notes

It's been an excellent year for software name NetApp Inc. (NASDAQ:NTAP) stock, which boasts a 40% lead in 2018 and a nearly 80% gain year-over-year. Earlier this month, the shares pulled back to their 40-day moving average, a trendline NTAP has bounced from twice already in 2018. Given NetApp's strong price action, alongside a surprisingly skeptical sentiment backdrop, it seems the stock is well-equipped to keep climbing.

Despite the stock's outperformance, analysts have remained on the sidelines. Of the 25 brokerages covering NTAP, 10 rate it a "hold" or "strong sell." What's more, the stock's average 12-month price target sits at $77.86, just below the stock's closing perch on Friday. This implies that the door is wide open for a round of upgrades and/or price-target hikes that could drive NTAP higher.

In addition, NTAP's Schaeffer's put/call open interest ratio (SOIR) sits at 1.68 and ranks in the 100th percentile of its annual range. This indicates that near-term put open interest outweighs call open interest by a wider-than-usual margin right now. An unwinding of these bearish bets could nudge the security higher.

Lastly, the stock's Schaeffer's Volatility Scorecard (SVS) of 95 out of a possible 100 means the stock has tended to realize greater volatility than what the options market has priced in over the past year.