AMD: $187K Bullish Bet Into Earnings

AMD reports earnings on 29 October 2019. On Friday, someone purchased 2499 calls betting $187K that AMD will beat analysts estimates next week. Since the stock has now completed a nine-month cup and handle pattern, should the company report solid earning numbers, it could trigger a multi months breakout.

Advanced Micro Devices, Inc. reports earnings after Tuesday’s closing bell, with Wall Street analysts expecting earnings per share (EPS) of $0.08 on $1.52 billion in second quarter revenues.

AMD, Earning Reports

The stock lost ground after the company met first quarter expectations and reiterated full-year guidance in April, ahead of a recovery wave that has now completed a nine-month cup and handle pattern (see chart below).

AMD, weekly

One option trader made a big bullish bet on Friday that AMD would stage a rally. The trader purchased 2,499 of 1 Nov’19 calls paying $187K for this trade. The transaction was executed at 07:25am PST.

AMD, Time and Sales

The trader picked $34.5 strike for his calls. This is an important level since the stock faced resistance at this level several times in 2019.

AMD, daily

Should the price break above that level, it could trigger a wave of short-covering. The stock’s short interest increased by over 30m during the last several months (see the table below). As of 15 Oct’19, the AMD’s short interest stood at 141m shares or 14% of the total float.

AMD, Short Interest

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