Digital Ally Gaps Higher on Patent Win; Tesla Bounces Back with Battery Contract

Digital Ally wins a crucial legal battle, while Mondelez deals with cyber attack fallout

by Patrick Martin

Published on Jul 7, 2017 at 10:28 AM

U.S. stocks are recovering after a rough day yesterday, as investors digest better-than-expected payrolls growth for June. Among specific stocks on the move today are surveillance specialist Digital Ally, Inc. (NASDAQ:DGLY), snack giant Mondelez International Inc (NASDAQ:MDLZ), and electric car name Tesla Inc (NASDAQ:TSLA). Here's a quick look at what's moving shares of DGLY, MDLZ, and TSLA.

Digital Ally Takes Off After Patent Victory

Digital Ally stock is up 47% to trade at $4.65, after the security company won a battle in its patent dispute with rival Axon Enterprise (AAXN). Today's bull gap is a much-needed shot in the arm for DGLY stock, which fell to a nearly five-year low of $2.95 on June 27. The shares are now trading well above their 50-day moving average, which acted as staunch resistance through much of the second quarter. 

A portion of today's big DGLY rally could be the result of short covering by some of the weaker bearish hands. Roughly 18% of the stock's float is currently sold short, and it would take over 38 sessions for all of these shorted shares to be covered. 

Cyber Attack Hits Revenue at Mondelez

Mondelez stock is down 0.2% to trade at $42.99, after the company warned that second-quarter revenue was negatively impacted by the recent global cyber attack. Today's weakness extends a recent pullback for MDLZ, which has tumbled nearly 9% from its June 2 18-month high of $47.23.

Despite the stock's technical troubles, calls remain the options of choice among MDLZ traders. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows Mondelez with a 10-day call/put volume ratio of 4.24, which ranks in the 91st percentile of its annual range. 

Massive Battery Contract Sends TSLA Higher

Tesla stock is up 2.2% to trade at $315.59, after the Elon Musk-led company reported it won a contract to install the world's largest grid-scale lithium ion battery for an Australian wind farm. Today's pop takes the edge off a rough couple of sessions for TSLA; as of Thursday night's close, the stock was down more than 14% on the week. For now, the stock's bounce from its 100-day moving average has taken TSLA out of bear-market territory -- which, based on its June 23 intraday high of $386.99, stands at $309.59. 

In the options pits, traders seem to be flocking towards calls. ISE/CBOE/PHLX data shows TSLA stock with a 50-day call/put volume ratio of 1.17, which ranks in the 91st percentile of its annual range.  

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