What an unfortunate stock that is being unfairly targeted because it is the new kid on the block.
Right before the last two option expiration dates, the stock was trading in the $14-15 range. On the first option expiration date in December, a short report came out that dropped the stock to approximately $8/share. Nearly a 50% drop. Days after the option expiration, the stock reclaimed the $14-15 range.
All was good until the January option expiration date. The same short report came out with additional details. (Details that I'm not convinced of and the company's response provided me enough comfort to continue my investment). The stock dropped again to mid $7/share. And now here we are after the option expiration date.
Based on the price action, it is clear that there is significant short interest. The company announced authorization for a stock buyback and participated in an investor conference. This resulted in an analyst placing a market perform rating on the stock. Out of three analysts, there is a high PT of $23 that was re-affirmed January 19th (5 days ago) and a low PT of $16 that was re-affirmed December 28th (27 days ago).
Looking at the chart, we're in nearly a mirror image of what occurred last OpEx date. If history repeats itself, we're looking to have a bullish week with a likely stock price range of $10-12/share. Within a couple of weeks, we should be back to $14-15/share--especially if the company issues additional statements or filings confirming the buyback occurred, which is expected according to Seeking Alpha analyst that allegedly spoke with IR.
I was bullish on this stock before the short, but I'm especially bullish now as we are looking at a significant reversal here. The upside far outweighs the downside here. If you see it drop into uncharted territory in the $5.50-$6.50, you might want to consider it finding a base first before purchasing. I believe the odds of this are highly unlikely. With a stop-loss set there and the knowledge that this is likely going back to where it was before the report at $14-15/share, your upside is 80% while your downside is less than 20%.
Right before the last two option expiration dates, the stock was trading in the $14-15 range. On the first option expiration date in December, a short report came out that dropped the stock to approximately $8/share. Nearly a 50% drop. Days after the option expiration, the stock reclaimed the $14-15 range.
All was good until the January option expiration date. The same short report came out with additional details. (Details that I'm not convinced of and the company's response provided me enough comfort to continue my investment). The stock dropped again to mid $7/share. And now here we are after the option expiration date.
Based on the price action, it is clear that there is significant short interest. The company announced authorization for a stock buyback and participated in an investor conference. This resulted in an analyst placing a market perform rating on the stock. Out of three analysts, there is a high PT of $23 that was re-affirmed January 19th (5 days ago) and a low PT of $16 that was re-affirmed December 28th (27 days ago).
Looking at the chart, we're in nearly a mirror image of what occurred last OpEx date. If history repeats itself, we're looking to have a bullish week with a likely stock price range of $10-12/share. Within a couple of weeks, we should be back to $14-15/share--especially if the company issues additional statements or filings confirming the buyback occurred, which is expected according to Seeking Alpha analyst that allegedly spoke with IR.
I was bullish on this stock before the short, but I'm especially bullish now as we are looking at a significant reversal here. The upside far outweighs the downside here. If you see it drop into uncharted territory in the $5.50-$6.50, you might want to consider it finding a base first before purchasing. I believe the odds of this are highly unlikely. With a stop-loss set there and the knowledge that this is likely going back to where it was before the report at $14-15/share, your upside is 80% while your downside is less than 20%.