Overwatch League Kickoff Wins Over ATVI Analysts

CYH spent the past month basing near record lows

by Karee Venema

Published on Jan 11, 2018 at 3:15 PM
Updated on Jan 11, 2018 at 3:19 PM

The U.S. stock rally is back on, with the Dow up triple digits at last check amid a surge in energy shares. Among other names making volatile moves today are video game maker Activision Blizzard, Inc. (NASDAQ:ATVI), hospital operator Community Health Systems (NYSE:CYH), and solar stock First Solar, Inc. (NASDAQ:FSLR). Here's a quick look at what's lifting shares of ATVI, CYH, and FSLR.

Overwatch League Sends Activision Stock to Record High

Activision Blizzard stock is trading up 3.6% at $69.23, earlier topping out at a record high of $69.31, after the company's Overwatch League -- a professional e-sports league based on its popular first-person shooter, Overwatch -- kicked off its inaugural season on Wednesday. While Cowen said the "media rights opportunity ahead has the potential to be a significant driver given the growing e-sports audiences," UBS raised its price target to $76 from $75.

ATVI shares are now boasting a more than 76% year-over-year lead, thanks to double-barreled support from their 120- and 200-day moving averages. Plus, they are now trading north of the $67-$68 region, which kept a tight lid on all Activision Blizzard rally attempts since late August.

Part of ATVI stock's recent surge has likely come as the result of a short squeeze. Short interest on the equity is down almost 56% from the mid-November reporting period to 6.95 million shares. This source of buying power appears to be nearly exhausted, however, considering it would take fewer than two sessions to cover the remaining bearish bets, at the security's average pace of trading.

Shanda Group Boosts Stake in Community Health Systems

Shanda Group increased its stake in Community Health Systems, with the majority shareholder now holding roughly 24% of common CYH stock. While Cantor Fitzgerald said the move was "constructive," a "major revaluation of the stock" is unlikely. Leerink also chimed in, saying it could "increase activism" on the healthcare name.

In reaction, CYH stock has surged 18.2% to trade at $4.75, on track to close north of its 50-day moving average for the first time since Oct. 5. Longer term, the shares have shed more than half their value since topping out near $10.20 in late June, and spent December basing near their Nov. 21 record low of $3.85.

Short sellers haven't budged from their near-record exposure, either. Short interest edged up 1.1% in the latest reporting period to 31.90 million shares -- not far from the Nov. 15 all-time peak of 32.39 million shares, and representing a hefty 30% of Community Health Systems stock's available float.

First Solar Stock Has Roughly Tripled Since April

Vertical Group initiated coverage on First Solar stock with a "buy" rating, with analyst Gordon Johnson saying the alternative energy shares are "decidedly undervalued." The bull note has FSLR shares up 9.1% to trade at $76, after topping out at a six-year high of $76.22 earlier.

Today's surge just extends the security's longer-term momentum. Since bottoming at $25.56 in early April, First Solar has roughly tripled -- a surge underscored by support from the stock's 30- and 80-day moving averages.

There's room for more upbeat analyst notes to help lift FSLR stock even further up the charts, considering half of the brokerages covering the shares maintain a tepid "hold" rating. Plus, the average 12-month price target of $69.11 stands at a discount to the security's current perch.

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