Sea stock presents a compelling bullish case for 2025
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Dell Technologies (DELL)
Similar to how investors underestimated foundry chip stocks in 2023, data center companies are being undervalued heading into 2025, with artificial intelligence (AI) now front and center. Dell Technologies is well-positioned for growth, driven by several key factors. On the technical side, the stock remains up over 50% year-to-date in 2024, with support around the $115 level following its post-earnings spring movement.
Any dips toward the round $100 level should be considered as an opportunity, using that level to define risk. In the options market, put sellers are active at the $100-strike and extending to deep in-the-money $170-strikes for 2025, suggesting strong support for the stock and positioning for stability. Additionally, aggressive out-of-the-money call sweepers have appeared, including a significant sweep of the June 195-strike calls, signaling expectations for substantial upside. The high 50-day buy-to-open put/call volume ratio (96th percentile) indicates that premium buyers may be too pessimistic about the stock, setting up for a potential sentiment reversal.
Dell's Schaeffer's Volatility Index (SVI) of 36%, which is in the 22nd annual percentile, shows that low volatility is currently priced into the stock’s options. However, the company’s consistent ability to reward premium buyers, as evidenced by its Schaeffer’s Volatility Scorecard (SVS) rating of 85, suggests the stock may experience larger-than-expected moves compared to the options market’s low volatility expectations.
Sea (SE)
Sea stock presents a compelling bullish case for 2025, thanks to its strong positions in gaming, e-commerce, and fintech across emerging markets. The company has seen impressive growth in its gaming business, with Free Fire's revenue expected to grow by over 30% year-over-year in 2024.
From a technical perspective, Sea recently broke out of a large stage one weekly base pattern, transitioning into a stage two uptrend as we head into 2025. Investors should view any pullback to the round $100 and $90 support zone as a buying opportunity. A move above the $125-130 resistance level could send prices back to the $200 pivot level from 2021, signaling further upside.
The short interest percentage of the float is relatively low at 4.09%, but short interest has increased by 303% in 2024 since the December 2023 lows, coinciding with the stock’s nearly 200% YTD rise. This could lead to an unwinding of shorts in 2025, providing additional momentum for the stock.
On the options front, we are seeing deep in-the-money (ITM) put sellers at the December 2025 and January 2026 130-strike puts, with large traders expecting the share price to be above this level by year-end.
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CF Industries (CF)
CF Industries (CF)
Shares of fertilizer producer CF rose nearly 500% between their 2020 low to their 2022 peak. In the two years since, the equity has retraced approximately 61% of the move higher, finding support in 2023 and again in 2024 from a rising 200-week moving average (gold line above). During this time period, the shares consolidated by forming a saucer-type pattern, suggesting an accumulation has been taking place. To top it off, the 50-week moving average is meeting up with the 200-week trendline, making now an opportune time for a long-term buy.
Analyst ratings are lukewarm at best, with six "buy” or better, seven "hold," and two "sell" or worse recommendations on deck, leaving ample room for upgrades in the coming months that could lift the shares. Bears have been aggressively establishing short positions too, with short interest rising 43% in the most recent reporting period. If CF continues moving higher, bears may feel pressure to cover their positions, creating a tailwind for the stock.