Allegheny Technologies Incorporated (ATI) Lockout Stokes Volatile Session

Allegheny Technologies Incorporated (NYSE:ATI) hit a six-year low earlier, but has since swung higher

by Karee Venema

Published on Aug 14, 2015 at 3:06 PM
Updated on Jun 24, 2020 at 10:16 AM

Allegheny Technologies Incorporated (NYSE:ATI) tumbled to a six-year low of $19.65 out of the gate, as traders reacted to news the Pittsburgh-based metal producer has issued a lockout notice to more than 2,000 United Steelworkers union workers -- starting tomorrow -- as contract negotiations stall. The company will continue to operate its plants with non-union and salaried workers.

However, the shares found a foothold atop the $20 mark -- and have since swung 2.2% higher to trade at $20.38. In fact, the shares have not closed a week south of this round-number level since March 2009. Nevertheless, ATI remains a long-term laggard, with the stock off 41.4% year-to-date.

On the sentiment front, option players have been rolling the dice on even more downside in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ATI's 50-day put/call volume ratio of 0.99 ranks in the 90th annual percentile. Simply stated, puts have been bought to open over calls at a faster-than-usual clip.

Echoing this is ATI's Schaeffer's put/call open interest ratio (SOIR) of 0.95, which rests higher than 60% of all similar readings taken in the past year. In other words, short-term speculators are more put-skewed than usual toward the stock.

This skepticism is seen elsewhere on the Street, with nearly 63% of covering analysts maintaining a "hold" or "strong sell" suggestion toward the stock. On the other hand, Allegheny Technologies Incorporated's (NYSE:ATI) average 12-month price target of $32.81 stands at a 61% premium to current trading levels, leaving plenty of room for price-target cuts, should the stock extend its long-term downtrend.

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