We recommended a BWXT call option Sunday night
Subscribers to Schaeffer's Weekend Trader options recommendation service received this BWXT commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
Shares of BWX Technologies Inc (NYSE:BWXT) are enjoying support at their March and July 2024 highs as they break above resistance at the $110-$111 range. What’s more, all daily moving averages are moving higher and may provide a floor for the nuclear energy stock in the event of a pullback.
Nevertheless, short interest rose 38.7% in the last two reporting periods, indicating an unwinding of this pessimism could generate tailwinds for BWXT. Plus, aggressive put sellers are now showing up at the June 105-strike to buy the June 120- and 130-strike calls. It’s also worth noting that the equity's gamma-weighted Schaeffer's open interest ratio (SOIR) ranks at 1.23, which has previously been indicative of bottoms in price in the past.
The equity's Schaeffer's Volatility Index (SVI) of 29% that ranks in the 26th percentile of its annual range, meaning options traders are now pricing in low volatility expectations. Our recommended call option has a leverage ratio of 6.4 and will double on a 16% gain in the underlying security.