Schaeffer's Trading Floor Blog

Stocks at New Lows: Alcatel-Lucent and Sun Life Financial

ALU and SLF have each retreated to their lowest price since April 2009

by 11/9/2011 3:25 PM
Stocks quoted in this article:

With the major market indexes steepening their losses throughout today's session, it's no surprise to find a preponderance of stocks hitting new annual lows. On the NYSE, 33 securities have slipped to a fresh 52-week nadir, compared to 24 stocks in annual-high territory. Over on the Nasdaq, 53 new lows are easily outnumbering just eight new highs. Among today's notable technical laggards are Alcatel-Lucent (ALU - 1.99) and Sun Life Financial Inc. (SLF - 21.16), which have both slipped to new two-year lows.

ALU price chartLooking first at telecom stock ALU, today's session low of $1.97 is its worst price since April 2009. The shares are now trading well below resistance at their 10-week moving average, which has highlighted ALU's year-to-date decline of 27%.

Today marks the first session all week that ALU hasn't been pelted with negative notes from gloomy analysts. After issuing a profit warning last Friday, ALU was cut to "sell" at both Citigroup and S&P Equity, and the stock has since been hit with price-target cuts from Nomura, WestLB, Natixis, J.P. Morgan, and Credit Suisse. However, Bernstein on Tuesday took the road less traveled by upping ALU to "market perform" from "underperform," helping the beaten-down stock eke out a fractional gain by the time yesterday's session wrapped up.

SLF price chartTurning to SLF, the stock fell as far south as $21.15 earlier -- marking its own lowest price since April 2009. The insurance issue has been struggling during the past several sessions, after SLF warned of increasing sensitivity to fluctuating bond yields. This negative news caused SLF to gap well below resistance at its 40-day moving average, which has been a thorn in the stock's side since March.

Despite the dismal price action, nearly half of the analysts following SLF maintain a bullish rating on the shares. Zacks tallies four "buy" or better ratings for the stock, compared to just five "holds" and not a single "sell." Going forward, a round of downgrades from this group could weigh heavily on SLF.

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