Small-caps have been a pocket of strength of late, as evidenced by the three-month gain of 2.6% for the Russell 2000 (RUT). By comparison, both the S&P 500 Index (SPX) and the Dow have chalked up negative returns in that same time frame. Looking closer at the outperforming sector, UGG creator Deckers Outdoor Corp (NASDAQ:DECK), solar power concern JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO), and biopharmaceutical issue MannKind Corporation (NASDAQ:MNKD) are three small-cap standouts that have performed well in 2013, and could be poised to continue this uptrend in the near term. At Tuesday's close, the market capitalizations for these three companies stood at $2.00 billion, $302.3 million, and $1.72 billion, respectively.
Deckers Outdoor Corp (NASDAQ:DECK) has been in technical redemption mode since bottoming out at a three-year low of $28.53 last October, with the shares up more than 106% to trade at $58.96. Additionally, the stock has put in a solid performance against the SPX, and has outpaced the broad-market barometer by north of 16 percentage points throughout the past 40 sessions. DECK's momentum this year has been highlighted by its 32-week moving average. Not only has this former layer of resistance been ushering the stock up the charts since late January, but it provided a springboard for DECK's most recent pullback.
Not everyone on Wall Street is convinced the equity can sustain this upward trajectory. Short interest climbed 9% in the latest reporting period, and now accounts for 29.4% of the stock's float -- a level not seen since early June. What's impressive is DECK's ability to linger near annual-high territory in the face of all this selling pressure. Additionally, it would take almost eight sessions to cover these shorted shares, pointing to an ample amount of sideline cash available to help to help fuel DECK's fire, should these bearish bettors begin to capitulate to the stock's positive price action.
JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) has had a stellar run up the charts in 2013, with the stock tacking on more than 93%. The momentum is continuing today, with the equity jumping 5.6% on the heels of sector peer Trina Solar Limited's (ADR) (NYSE:TSL) upbeat forecast.
However, pessimism toward the equity is found on all corners of the Street. In the options pits, the stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) has grown to 1.41 from its Aug. 1 reading of 0.16. Elsewhere, short interest rose 5% during the past two reporting periods, and now accounts for 15.2% of the equity's available float. Plus, the consensus 12-month price-target of $6.58 stands at a discount to JASO's current perch at $8.24.
The China-based company is slated to take its own turn in the earnings confessional before the market opens on Aug. 29. Despite falling short of analysts' bottom-line expectations in six of the past seven quarters, the stock has still managed to average a gain of 11.9% in the session following its report. Another post-earnings surge from JASO could have some of the bears hitting the exits en masse, which might translate into a contrarian boon for the security.
MannKind Corporation's (NASDAQ:MNKD) technical fortitude is witnessed in its 165% year-to-date advance. This strength is seen in today's session, with the stock up 0.8% at $6.11. Helping push the stock higher has been its 100-day moving average -- currently located just north of the $6 mark. After testing this foothold earlier in the session, MNKD has managed to muscle its way back above this long-term layer of support.
In the options arena, speculators have been loading up on puts with some rapidity in recent weeks. At the ISE, CBOE, and PHLX, the stock's 10-day put/call volume ratio of 0.55 ranks in the 96th percentile of its annual range. Simply stated, puts have been bought to open over calls at a near-annual-high clip during the past two weeks. As such, the stock's front-month gamma-weighted Schaeffer's put/call open interest ratio (SOIR) is docked at 1.14, indicating near-the-money put open interest outweighs call open interest in the September series of options. Going forward, this heavy accumulation of puts -- specifically at the underfoot September 6 strike -- could translate into an additional level of support for MNKD, as the more than 14,000 contracts that reside here begin to unwind ahead of expiration.
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