Are GoPro Inc, Ambarella Inc Breakouts Shaking the Shorts?

GoPro Inc (GPRO) and Ambarella Inc (AMBA) are rallying, possibly on short-covering activity

Nov 9, 2015 at 2:22 PM
facebook X logo linkedin


GoPro Inc (NASDAQ:GPRO) and its chip supplier Ambarella Inc (NASDAQ:AMBA) are bucking the broad-market trend lower, potentially supported by short-covering activity. Specifically, GPRO was last seen 3.4% higher at $25.99, while AMBA is up an even more impressive 4.1% at $56.53, at last check. Here's a closer look at what's happening on the technical and sentiment fronts for this pair of stocks.

Despite GPRO's intraday pop, the fact remains the shares have been dreadful -- shedding 59% year-to-date, and still struggling to muscle atop their descending 10-day moving average. Over the last week, short-term traders have been selling to open calls. Specifically, the stock's weekly 11/13 26-strike call has seen the biggest change in open interest during the past five sessions -- per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- and over 1,000 short positions have been initiated here. In so doing, these traders are counting on the shares to end the week -- when the series expires -- south of $26.

As alluded to earlier, short sellers have also aggressively bet against GoPro Inc. Specifically, short interest spiked over 41% during the latest reporting period, and now over half of the stock's total float is sold short.

It's a similar technical story for AMBA. While the shares have advanced close to 11.5% on the year, they've been in full-blown sell-off mode since hitting a record high of $129.19 in late July. In fact, during the past 60 sessions, the stock has underperformed the broader S&P 500 Index (SPX) by a mind-bending 50 percentage points.

Shorts have been getting in on the action. During the last two reporting periods, short interest on AMBA jumped 15.7%, and now represents 44.6% of its total float -- or about seven days' worth of trading, at typical volumes.

During the last week, some short-term speculators have been banking on a rebound north of the round $60 area by week's end. Specifically, Ambarella Inc's weekly 11/13 60-strike call is among the equity's options experiencing the most sizable upticks in open interest, looking back five days. A number of these have been bought to open, according to data across the major exchanges. However, in order for the call to expire in the money by Friday's close, AMBA will need to take out its 40-day trendline -- currently located at $58.47 -- which hasn't happened since early August.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI