More than 1 million calls have exchanged hands over in the options pits
We already broke down AMC Entertainment (AMC) and the shockwaves it sent through Wall Street. It's not just AMC though; the shares of BlackBerry Ltd (NYSE:BB) are up 36% to trade at $15.71 at last check, once again a target of Reddit's WallStreetBets forum. The tech icon was the second most mentioned in the platform over the past 24 hours, falling behind AMC as "meme stocks'" return to the spotlight.
Today's bull gap has Blackberry stock trading at its highest level since February, which was shortly after the speculative trading frenzy first began. The security trended lower after coming down from that peak, trading in a tight range between $7 and $12. BB has also regained the support of its 40-day moving average, and is now up 196.8% in the last 12 months.
Analysts remain pessimistic towards the equity, with three of the four in coverage calling it a tepid "hold," while one says "strong sell." Echoing this, Blackberry stock's 12-month consensus target price of $7.75 is a whopping 51.1% discount to its current perch. In other words, there's massive upgrade potential to BB that could nudge the stock even higher.
Drilling down to today's options activity, 1.02 million calls have crossed the tape so far, which is 12 times the intraday average. Most popular is the 6/4 15-strike call, followed by the 20-strike call in the same weekly series, with new positions currently being opened at both. This indicates premium buyers expect more upside for BB by the end of the week, when these contracts expire.
A couple of things worth noting about Blackberry stock: like AMC, BB's 14-Day Relative Strength Index (RSI) sits at 76, a level that certainly constitutes "overbought" territory. Meanwhile, 9% of BB's total available float is sold short. In other words, there is still ample room for a continued short squeeze, but investors should keep a close eye on those RSI levels.