Schaeffer's Top Stock Picks for '25

Option Bears Aren't Buying Seagate Technology PLC's (STX) Rally

An upbeat Barron's column has done little to sway Seagate Technology PLC (STX) option buyers

Apr 11, 2016 at 2:35 PM
facebook X logo linkedin


Seagate Technology PLC (NASDAQ:STX) is up 6.5% at $35.38 today, after an upbeat article in Barron's, which called the stock's dividend yield "enticing" (subscription required). In addition, the author waxed optimistic on demand for large drives utilized in data centers. With this rally, STX has pared its year-to-date loss to 3.5% -- likely to the dismay of recent option buyers.

Speculators have been regarding STX with caution lately. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.51 sits higher than 77% of readings in the past year. Echoing this is STX's Schaeffer's put/call open interest ratio (SOIR) of 1.14 -- in the 86th percentile of its annual range, indicating that near-term traders are far more put-heavy than usual.

Today, STX options are trading at nearly twice their typical intraday pace, but that doesn't mean speculators are changing course. In fact, one of the most active options is the May 36 put, where traders appear to be buying to open new positions. These put buyers are betting that shares of STX will remain below the $36 level through May 20, when the back-month option expires.

Pessimism is rampant outside of the option pits, as well. Of the 21 analysts following STX, 15 rate it a "hold" or worse. And Cowen and Company initiated coverage on the equity this morning with a tepid "market perform" rating and $36 price target. Short interest also remains elevated, representing about seven sessions' worth of trading, at STX's typical daily volume.

However, today's rally may be running out of steam at the shares' 140-day moving average, which capped STX's late-March pop. In fact, Seagate Technology PLC (NASDAQ:STX) hasn't toppled this trendline in more than a year.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical  levels, and top economic stories straight to your inbox.

 
 

Which of These SUB-$5 Stocks Could 26x From Here? (AD)

He called a rare 11x on Tesla…

Then he called a 26x on Workhorse…

Then an even rarer 35x on Nio Inc…

Now Tim Bohen says these 5 tiny “America First” stocks are next up in 2025.

They’re trading for less than $5 right now.

But thanks to Elon & Trump’s new alliance…

They could be off to the races in Trump’s first 100 days.

And right now for a limited time…

You can get the names & tickers for just $1 here. (AD)

10 Stock Picks FREE
 
 

Featured Articles from Trusted Partners:

🚀 One Stock Pick Could Change Everything in 2025
What if one stock pick could define your success next year? Get 10 expert-vetted stocks set for 2025—plus 5 bonus picks to watch now. Get the Report →

🆕 New Options Need New Trading Strategies
Zero-DTE options are the newest (and hottest) options to trade.  Professional traders have rushed into the market and are making a mint.  Don’t get left behind - learn all about these options, how to trade them, market setups to profit from, plus much more. Download now →

👀 Revealed: 3 Defensive Stocks for Your Portfolio
Worried about the market? This free report reveals 3 under-the-radar defensive stocks for uncertain times in any kind of economy.

 

 
 

FREE Report Download

 

Follow us on X, Follow us on Twitter