The Chinese Stock Squeezing Shorts; Plus, SunPower Shares Sink

FireEye stock could be set for more bullish brokerage notes

Managing Editor
Aug 2, 2017 at 10:13 AM
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Analysts are weighing in on Chinese e-tailer Alibaba Group Holding Ltd (NYSE:BABA), cybersecurity issue FireEye Inc (NASDAQ:FEYE), and solar energy stock SunPower Corporation (NASDAQ:SPWR). Here's a quick roundup of today's bullish brokerage notes on shares of BABA, FEYE, and SPWR.

Alibaba Stock Puts the Squeeze on Short Sellers

Alibaba shares are down 1.2% at $152.81, as U.S.-listed Chinese stocks sink on reports the Trump Administration may investigate China's trade practices. This is overshadowing a price-target hike to $180 from $175 at Barclays, and reports that Alibaba is looking to ramp up its exposure to the Chinese telecom market by possibly investing in state-owned China Unicom.

It's been a banner year for Alibaba stock, though, which is still up 74% so far in 2017, and shot to a record high of $160.39 last Thursday. The surge has been crushing short sellers, too, though the bearish bettors have refused to budge. Short interest jumped 9.4% in the two most recent reporting periods to 140.81 million shares -- an all-time peak and 12 times BABA stock's average daily pace of trading.

FireEye Stock Jumps After Earnings

FireEye stock is up 3.1% to trade at $15.15, after the company reported a narrower-than-expected second-quarter loss of 4 cents per share, while its $154.3 million in revenue also topped estimates. FireEye also raised its full-year revenue forecast, and received no fewer than five price target hikes -- including one to $17 from $15 at BMO.

FEYE stock  is now boasting a 28.3% year-to-date lead -- finding support atop its rising 80-day moving average since a late-March bull gap -- and more bullish brokerage notes could help lift the shares even higher. As of last night's close, 14 out of the 19 brokerages covering FEYE rated it a "hold." In other words, the door is wide open for upgrades.

SunPower Stock Gaps Lower After Earnings

SunPower stock is down 18.4% to trade at $19.29, after the company lowered the top end of its full-year revenue forecast and said it's unloading its stake in the 8point3 Energy Partners LP. This is overshadowing a narrower-than-expected quarterly loss and price-target hikes at Oppenheimer (to $13) and Deutsche Bank (to $9).

And while SPWR stock is at risk of losing a foothold atop its 40-day moving average -- a trendline that's held has as firm support since late April -- it remains up 45% year-to-date. Today's bear gap has the security short-sale restricted, but it's been a favorite among bearish bettors, with 16.85 million shares sold short, or 28.3% of SPWR's total available float. 

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