Now looks like a good time to weigh in on AZN with calls
Biopharmaceutical stock AstraZeneca PLC (NASDAQ:AZN) settled around the $64.52 level on Friday, which also marks its $200 billion market cap as well as two prior highs in November 2021 and July 2020. Considering this solid technical setup, now looks like the perfect time to buy calls on AZN.
An unwinding of pessimism amongst options traders could put additional tailwinds at the stock’s back. Its Schaeffer’s put/call open interest ratio (SOIR) of 1.10 stands higher than 94% of readings from the past year, meaning short-term options traders are extremely put-biased right now. What’s more, similar readings have had bullish implications for AZN in the past.
Echoing this, the stock’s 10-day put/call volume ratio of 1.23 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the 94th percentile of its annual range. In other words, long puts are being picked up at a much quicker-than-usual clip.
Switching gears, while it looks like shorts have been targeting the stock, with short interest up 40% in the most recent reporting period, the stock is up about 15%, which in turn, implies strength.
AstraZeneca could also be the recipient of some fresh analyst coverage. Just five analysts currently cover the stock, with four at a “strong buy,” and one at a “hold” rating.
Finally, our recommended call option has a leverage ratio of 6.5 and will double in a 16.1% rise in the underlying stock.
Subscribers to Schaeffer's Weekend Trader options recommendation service received this AZN 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.