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Monday, April 23, 2018

AMD Bears Caught Short This Week For Earnings

We previewed a number of our companies on Friday including AMD (NASDAQ:AMD). We wanted to point out that we noticed the ratio of puts to calls has dropped likely meaning large investors are less bearish. Uh oh shorts.

The nearby "interest" of puts and calls is weighted to puts but the options further out have become more balanced when looking at CBOE who tracks the data.

Meanwhile short interest is still sky high at 22% of the float up 5% in the last month according to Short Squeeze.

The huge short interest shows you that bears are stacked up against AMD and may be trapped.  If you get any good news the stock can jump. That's a good risk/reward.

Our quarterly numbers only have 1ct upside for this quarter but 8ct upside for next quarter. If the guide is closer to our numbers, also look out. The combination of Ryzen ramping in Q1 and Q2 along with EPYC building through the year gives our numbers a steeper trajectory higher than the Street.

But we also noticed that the Street numbers have, even recently been sneaking higher.  Yahoo Finance shows that in the last seven days the Street's 2018 number inched up by a penny.  That's not a sign of bearishness, that's a sign of a hint that numbers are going higher.

If correct, look out shorts.

AMD reports Wednesday after the close with a webcast at 5:30 EDT.

Conclusion

We are bullish on AMD. There are many crypto bears short AMD but the puts versus calls have balanced out hinting to institutional intentions. Meanwhile the short interest is still sky high.  Street estimates even ticked higher.  If there is some combination of 'less-bad' miner demand or better core fundamentals, look out shorts.

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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. Model portfolio trades and positions are hypothetical to be used for directional analysis and ratings purposes. Elazar and its employees do not take individual stock positions to avoid front running and other potential customer related issues. Elazar does take macro positions for clients where directions can change regularly.

2 comments:

  1. When these shorts begin covering, it is going to be a blood bath. May they rest in peace, or maybe not, peace that is...

    ReplyDelete
    Replies
    1. Johnny Im with you. hopefully this quarter.

      Delete

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