The U.S. stock market will be closed next Monday, May 28, for Memorial Day, and the holiday-shortened week has been bullish for the S&P 500 Index (SPX) over the long term. This pair of Apple (NASDAQ:AAPL) suppliers have been notable outperformers during the four-day trading week, though fellow chip stock Advanced Micro Devices, Inc. (NASDAQ:NASDAQ:AMD) can't say the same.
In fact, according to data from Schaeffer's Senior Quantitative Analyst Rocky White, AMD has been one of the worst SPX stocks during Memorial Day week, averaging a loss of 2.51% over the last decade. What's more, the semiconductor concern has finished the week with a gain just once.
A move of this magnitude would put a small dent in AMD's recent price action. Since hitting an annual low of $9.04 in early April, the stock has gained more than 44%. Today, Advanced Micro Devices is up 0.5% to trade at $13.05 -- on track for its highest close since Feb. 1. As such, the security's 14-day Relative Strength Index (RSI) was last seen well into overbought territory at 74.9, which heightens the chance for a near-term retreat.
There's plenty of skeptics bracing for a pullback, too. AMD's Schaeffer's put/call open interest ratio (SOIR) of 1.07 ranks in the 81st annual percentile, meaning short-term speculators are more put-skewed than usual. Data from the major options exchanges shows significant buy-to-open activity at the July 9 and 10 puts, though some of this could be protective in nature.
Plus, although short interest pulled back from its mid-April peak in the most recent reporting period, there are still 179.4 million shares sold short. This accounts for more than one-fifth of AMD stock's available float, or three times the average daily pace of trading. And while some bullish brokerage buzz is starting to swirl, the majority of analysts still maintain a "hold" or "strong sell" rating.
Whether traders want to bet on continued upside for AMD stock, or roll the dice on a pullback, it's an opportune time to do so with options. The equity's Schaeffer's Volatility Index (SVI) of 36% ranks in the lowest percentile of its annual range, indicating premium on short-term strikes is relatively cheap at the moment, from a volatility standpoint.