Under-the-radar tech
- TTMI options volume high on Tuesday
- Stock up more than 8% Tuesday to record high
- Put-call balance offering sentiment insights?
The Nasdaq 100 (NDX) tech index is up a market-leading 17% this year, and there’s a tech stock that, since the early April market lows, has more than doubled in price—outperforming NDX by more than five to one on a percentage basis.
Oracle (ORCL)? Alphabet (GOOGL)? Perhaps NVIDIA (NVDA)? All three companies have captured their fair share of headlines recently, and have contributed significantly to the NDX’s gains. But the stock in question is TTM Technologies (TTMI), a manufacturer of circuit boards, microelectronics, and other tech components that has handily outpaced its higher-profile brethren since April 8, rallying roughly 222%:
Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)
Given the stock climbed more than 8% intraday on Tuesday to yet another record high, its heavy options volume was hardly out of left field. On a relative basis, activity was tilted toward put options: Although call volume in the early afternoon was 3,361 contracts and put volume was 1,337, the call total was a little less than 11 times the daily average, while the put total was nearly 20 times average.
The largest trades in each type of option may offer some clues about possible trader sentiment. In early trading, the October $60 puts had volume of more than 500 contracts (later topping 900) and the March $70 calls had volume of 2,500 (the stock traded between $54.69 and $58.74):
Source: Power E*TRADE. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest directly in an index.)
While we can’t know the motivations of the traders involved, we do know that the put options have a much shorter-term horizon (expiring in a little more than three weeks) than the calls (expiring in roughly six months). If we start with the basic principle that more traders buy options than sell them, we could say that at least some of yesterday’s put buyers may have had a short-term bearish outlook, while at least some of the call buyers had a longer-term bullish outlook.
Overall, that could be considered a relatively logical perspective on a stock that has recently experienced such a high-momentum rally.
Market Mover Update: For a day, at least, a long-term support level in crude oil appeared to be holding. November WTI crude oil futures (CLX5) snapped a four-day losing streak with a 1.8% rally on Tuesday (see “Support, resistance, and crude oil”).
Today’s numbers include (all times ET): mortgage applications (7 a.m.), new home sales 10 a.m.), EIA Petroleum Status Report (10:30 a.m.),
Today’s earnings include: Cintas (CTAS), KB Home (KBH), Thor Industries (THO).
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