Volume is what moves the entire market, and this fact is often lost in the sea of indicators, patterns and trend lines that dominate today’s concept of analysis. However, what most investors don’t realize is that these indicators and patterns are nothing more than recognition of price action, and price action is driven by volume.
So, at the end of the day, those who understand volume understand where and when a stock or exchange-traded fund (ETF) might start moving. It’s not just the average volume that stands out today; This is the volume of the call option, which is important because of its implications for the underlying stock. Call options only pay off if the stock reaches a certain price by a certain date. Higher stakes mean higher levels of conviction.
That’s why investors can count on high confidence in the growth of stocks like Kameko company. New York Stock Exchange: CCJ in the basic materials sector as a uranium mine or healthcare sector at a giant’s discount Pfizer Inc. New York Stock Exchange: PFE and an even broader ETF covering regional banks through Regional Bank ETF SPDR S&P NYSEARCA:KRE. There are many reasons to justify the increased volume of these bullish bets; here are some of them,
Cameco: Tech trends need uranium to work
Kameko today
(As of 1/2/2025 5:45 PM ET)
- 52 week range
- $35.43
▼
$62.55
- Dividend yield
- 0.21%
- P/E ratio
- 274.54
- Target price
- $66.56
There’s a reason why the biggest names in the tech sector, Amazon.com Inc. NASDAQ:AMZN, Alphabet Inc. NASDAQ: GOOGLEand other giants are now betting on nuclear energy. Today’s energy grid simply will not be able to meet the demand from new computer developments.
Artificial Intelligence is one topic that requires its own set of energy needs. However, they are still limited compared to what’s coming next: quantum computing. Nuclear energy appears to be the most viable solution as these technologies become more advanced and integrated into the global economy.
That’s why call options traders have been overwhelmed by Cameco stock in recent weeks, with total trading volume reaching 384,705 call options. Moreover, Wall Street analysts now see a consensus target price for Cameco stock of $66.6 per share, implying a net upside of 30% from today’s stock price level.
These trends also explain the 9.3% collapse in the company’s short interest over the past month, a clear sign of bearish capitulation ahead of these bullish events for the entire industry.
Pfizer stock discount won’t last long
Pfizer today
(As of 1/2/2025 5:45 PM ET)
- 52 week range
- $24.48
▼
$31.54
- Dividend yield
- 6.46%
- P/E ratio
- 35.96
- Target price
- $32.14
Trading at a significant discount to its 2022 highs, Pfizer stock now offers investors a rare opportunity to buy the industry giant at a discount. In addition to the price action, the discounts come from the company’s valuation multiples, such as price to book (P/B) of 1.7x compared to the healthcare sector average of 4.8x today.
As of December 2024, traders bought up to 201,090 call options, which was unusual compared to the usual volume of 157,196 Pfizer shares. This action confirms that not only are the shares cheap, but that a catalyst to reach those higher prices may be in play in the near future.
To build on these bullish trends, Guggenheim analysts maintained a Buy rating on Pfizer shares as of December 2024, this time also setting a $33 price target for them. This estimate implies a net upside of 25% from today’s levels.
In addition to these trends, investors may notice a 5.5% decline in short interest in Pfizer stock over the past month, perhaps as bearish traders see the same catalyst and upside potential that call option buyers saw to justify their unusual volume purchases.
Are regional banks set to soar due to rate cuts?
SPDR S&P Regional Banking ETF today
Regional Bank ETF SPDR S&P
(As of 1/2/2025 5:45 PM ET)
- 52 week range
- $45.46
▼
$70.25
- Dividend yield
- 2.46%
- Assets under management
- $5.09 billion
There is reason to believe that bonds will rise in the coming months, especially as the Federal Reserve (Fed) begins cutting rates and plans to continue doing so through 2025. These lower rates are helping assets like regional banks see a surge in profits. due to business activity.
With products like mortgages, credit cards, and auto loans, these regional banks could see higher earnings per share (EPS) in the coming months, which could easily lead to higher valuations for most of these stocks as well.
In addition to call option buyers seeing growth potential in regional banks, the SPDR S&P Regional Banking ETF offers a payout of $1.47 per share, which equates to a dividend yield of 2.42% today.
Before you consider the SPDR S&P Regional Banking ETF, you should hear this.
MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now, before the broader market catches on… and the SPDR S&P Regional Banking ETF wasn’t on the list.
While the SPDR S&P Regional Banking ETF currently has a Hold rating among analysts, the top-rated analysts think these five stocks are Strong Buys.
View five stocks here
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