Option traders could be betting on a breakout
Tandem Diabetes Care Inc (NASDAQ:TNDM) has essentially been moving sideways on the charts since February, trading in a tight range around the $60 level with the $55 region serving as support during a few brief pullbacks. This treading has let the closely watched 200-day moving average catch up to the shares, and it's served as a notable floor in the past three sessions following Tuesday's news of a team-up with Abbott Laboratories (ABT). What's more, an analyst just came in and recommended for investors to pick up the stock.
Specifically, Guggenheim began coverage with a "buy" rating and $76 price target, which is notable since the $75 price point has been a stiff ceiling during the equity's multi-month sideways trend. In fact, it's been three years since Tandem Diabetes Care has topped the $75 mark, though the average analyst price target actually rests up at $79.75. Analysts definitely like the stock, since 80% of those in coverage were recommending to buy the shares already.
Options traders have been bullish, as well. The 10-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 4.69 and ranks in the 81st annual percentile, showing stronger-than-normal demand for long calls. Peak open interest sits at the November 65 call, and the November 70 call is also home to a large number of contracts. TNDM shares are giving bulls hope today at least, last seen trading 2.1% higher after Guggenheim's note, putting them at $64.47.