AAOI is an interesting play opportunity. I will have to watch this one closely, because the short term chart looks like it has potential to go either way. This has been in a bearish market for the past year. This had a strong 3 day drop from around 42 to 32. It has consolidated between 30-34 for the past couple weeks after this drop. The last trading day formed a ...
Last week, Rosenblatt initiated coverage of AAOI at Sell amid worries of price wars and declining margins. Even with demand up for fiberoptics in China and the United States, price competition should heat up in 100G and 400G module markets, which may make AAOI's 40%-range gross margin unsustainable.
Piper Jaffray is upbeat on the optical-equipment makers today, ...
Feels like a possible setup for a two-weekish swing trade. The stock hasn't broken the trendline yet and is still trending long with decent volume.
Two possible entry points: the bounce off the trendline retest or near support @ around $40.50.
Profit Target: $49
Stop Loss (Trendline Retest) $41.90
Stop Lost (Trendline Break) $39.90