Pharmaceutical giant Bristol Myers Squibb Company (BMY) hit a 52-week high last week, and shares are up substantially over the past few months. One trader sees the rally continuing into the end of the year.
That’s based on the December 20 $65.50 calls. With 45 days until expiration, 5,121 contracts traded compared to a prior open interest of 143, for a 36-fold rise in volume on the trade. The buyer of the calls paid $0.23 to make the bullish bet.
Bristol Myers Squibb recently traded for about $54.50. Shares would need to rise about $8, or 15%, for the option to move in-the-money.
Looking past the one-year chart, it’s possible that shares could continue to trend higher from here. Shares peaked at about $80 in early 2023.
Revenues rose 9% over the past year, but overall earnings growth declined by 20% amid a slowing demand for pharmaceutical products. That’s kept shares largely down for the year until the recent rally.
Action to take: The current uptrend may pause a bit over the next few days, but will likely stay intact and send shares higher over the coming weeks. Investors may also like shares now for their 4.6% dividend.
For traders, the December 20 $65.50 calls look attractive, if shares continue their rally thanks to a year-end push higher for stocks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.