Tesla Stock Pops After Chinese Rival Unveils Electric SUV at CES 2018

TSLA remains heavily shorted, despite its impressive YOY gains

Jan 8, 2018 at 3:07 PM
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It's another record-setting day on Wall Street, with the Dow, S&P 500 Index (SPX), and Nasdaq Composite (IXIC) fresh off all-time peaks. While the major market indexes are trading in a tight range, however, several individual stocks are making big moves, including electric car maker Tesla Inc (NASDAQ:TSLA), Snapchat parent Snap Inc (NYSE:SNAP), and gene-editing name Intellia Therapeutics Inc (NASDAQ:NTLA). Here's a quick look at the what's moving the shares of TSLA, SNAP, and NTLA.

Tesla Shorts Could Be Covering

Tesla stock has surged 6% to trade at $335.58, after Chinese startup Byton unveiled its electric SUV at this year's CES. Today's pop comes on the heels of last week's news of Model 3 production delays, which sent TSLA tumbling to a one-month low. The security now appears poised to close back above its 200-day moving average for the first time since Dec. 20, though its 140-day trendline is keeping a lid on the shares -- just as it did during a mid-December rally attempt.

Longer term, TSLA shares are up 43.2% year-over-year, making it possible that some of today's upside could be the result of shorts covering -- or Wall Street reacting positively to Tesla CEO Elon Musk's tweet about an "old school drive-in" charging station. Short interest is up 15.4% since early October to 31.22 million shares, representing 26.1% of the equity's available float, or 5.2 times its average daily pace of trading.

Jefferies Downgrades Snap Stock

Jefferies downgraded Snap to "hold" from "buy," with the brokerage firm expressing concern over fundamental execution, including the Snapchat app redesign, as well as user growth. In reaction, the stock is down 3.6% to trade at $13.98, even as Credit Suisse boosted its price target to $18 from $17 -- territory not seen since last June.

Today's negative price action is just more of the same for the Facebook rival, with SNAP stock shedding more than one-third of its value over the last nine months. Plus, the $17 mark -- which coincides with Snap's early March initial public offering (IPO) -- has served as staunch resistance since a mid-July bear gap.

Against this backdrop, most analysts are already skeptical of SNAP shares, with 24 of 29 brokerages maintaining a "hold" or "strong sell rating. Plus, the average 12-month price target of $12.29 stands at a discount to the current Snap stock price.

Intellia Therapeutics Stock Could Be Overdue for Downgrades

Intellia Therapeutics stock is down 12.1% to trade at $19.97, after a journal paper, which has not been peer-reviewed, questioned the efficacy of the CRISPR-Cas9 gene-editing technique against an immune system response. The equity is now off more than 40% from its Oct. 31 record high of $33.34, though its 200-day moving average is continuing its newfound role as support.

Should NTLA shares continue to sell off, a round of bearish brokerage notes could create even bigger headwinds. Of the five analysts covering the stock, four maintain a "strong buy" rating -- without a single "sell" on the books. What's more, the consensus 12-month price target stands at a lofty $32.67.


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