With a market capitalization of roughly $8.19 billion, Xilinx Inc. (NASDAQ: XLNX, Stock Forum) is large by mid-cap standards, but the company is dwarfed by Intel Corp.'s (INTC) market capitalization -- a whopping $116.78 billion. However, judging XLNX by its size would be a folly, as the company has proven to be considerably nimble in the current market environment. For instance, on Jan. 19, the company posted a Street-beating 42% jump in third-quarter earnings.
Technically speaking, XLNX has rallied more than 41% during the past 52 weeks, with the stock adding nearly 15% since the start of 2011. The equity has also broken out to a series of multi-year highs, bolstered by support at its 10-day and 20-day moving averages. XLNX is currently consolidating those gains just above its 10-day trendline, as it gathers strength before embarking on its next leg higher.
Despite the security's strong price action, investors remain stubbornly bearish on XLNX. Among options traders, the stock's Schaeffer's put/call open interest ratio (SOIR) has ballooned to 2.75, indicating that puts nearly triple calls among options with less than three months until expiration. XLNX's SOIR also rests at an annual high, meaning that options traders have not been more negatively aligned toward the shares during the past year.
But it seems that traders are beginning to capitulate to XLNX's technical strength. According to data from the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE), nearly two calls have been bought to open for every one put during the prior two weeks, resulting in a 10-day ISE/CBOE call/put volume ratio of 1.92. A continued unwinding of negativity among options speculators could bring more buyers to the table.
Meanwhile, the brokerage bunch remains entrenched in the bears' camp. According to Zacks, 14 of the 24 analysts following XLNX rate it a "hold" or worse.
Additionally, Thomson Reuters reports that the stock's consensus 12-month price target arrives at $31.44 - a discount to XLNX's close at $33.29 on Monday. As such, any upgrades or price-target increases could provide additional buying pressure.
Finally, short interest rose by more than 15% during the prior month, resulting in about 31.56 million XLNX shares sold short. With a short-to-float ratio of 12.18%, the equity has plenty of fuel for a potential short-covering rally as it extends its current uptrend.
Disclosure: Joseph Hargett has no financial interest in any of the equities or products mentioned in this column