Bullish option flow was detected in ERIC stock on March 11, 2022, after UBS upgraded the stock.
Bullish Option Flow
Make sure to review this lesson on option flow so that you understand the image above.
Bullish option flow was detected in Ericsson with 9,773 calls trading, 6x expected, and implied vol increasing over 11 points to 64.70%. Apr-22 $9 calls and Jan-24 $10 calls were the most active options, with total volume in those strikes near 9,200 contracts.
UBS upgrades Ericsson to Neutral, says DOJ probe priced in
On March 9, 2022, UBS analyst Francois-Xavier Bouvignies upgraded Ericsson to Neutral from Sell with a price target of SEK 84, down from SEK 96. The shares are already pricing in about $10B of negative impact from the U.S. Department of Justice investigation into alleged payments to terrorist organization ISIS, Bouvignies tells investors in a research note. The analyst believes the market is likely pricing in “significant fines and/or other potential overhang which is challenging to assess.” Based on “recent expert calls,” Bouvignies understands that the DOJ does not have the authority to ban companies from operations. Nonetheless, he believes it will take time for Ericsson to regain investor trust.
Ericsson says certain officers named as defendants in New York case
On March 4, 2022, Ericsson said in a statement: “After the annual report was finalized on March 3, 2022, Ericsson learned that Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed in the United States District Court for the Eastern District of New York. The complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and disclosure policies and obligations and the conduct of its business in Iraq.” Source: https://www.ericsson.com/en/press-releases/2022/3/ericsson-annual-report-2021-published
Swedens Going To Do, What Swedens Do
Ericsson is based in Sweden. The Pirate Bay was based in Sweden for years. If you know what the Pirate Bay was back in the late 90s and early 2000s, then that says it all. Sweden is a parliamentary monarchy with free and fair elections and a strong multiparty system. Civil liberties and political rights are legally guaranteed and respected in practice, and the rule of law prevails. Remember, this is the home of the giant money laundering Swedbank, which kept separate books to help with money laundering. In some ways, you have to respect Sweden for just wanting to do business and shove all that globalism.
I’m not surprised by Ericsson’s actions. I see the actions by Ericsson as consistent with what we would expect coming from Sweden’s culture of “sticking it to the man”.
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📉 ERIC Stock Technical Analysis
The positive divergence between large players volume and price is VERY bullish. The short-term trend is negative, as is the long-term trend. ERIC is part of the Communications Equipment industry. There are 73 other stocks in this industry, ERIC did better than 43% of them. ERIC is currently trading in the lower part of its 52-week range, which is not a good signal. Agreed, the S&P500 Index is also not doing fantastic, but it still sitting in the middle of its 52-week range.
There is support at 8.09 from a horizontal line in the weekly time frame.
There is a resistance zone ranging from 8.46 to 8.46. This zone is formed by a combination of multiple trend lines in multiple time frames. There is also resistance at 12.23 from a trend line in the weekly time frame.
The technical rating of ERIC is bad and it also does not present a quality setup at the moment. ERIC stock has a Setup Rating of 3 out of 10. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when ERIC stock consolidates and has a Setup Rating of 8 or higher.