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Penny Stock Traders Find a Deep-Sea Treasure In OMEX

On the other hand, BIDU and ABBV shares are swimming in red ink today

Mar 22, 2018 at 3:08 PM
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The Dow is sharply lower today following the White House's announcement of tariffs on China. Three stocks making notable moves are shipwreck discovery specialist Odyssey Marine Exploration Inc (NASDAQ:OMEX), Chinese tech issue Baidu Inc (NASDAQ:BIDU), and Humira parent AbbVie Inc (NYSE:ABBV). Let's take a closer look at what's moving shares of OMEX, BIDU, and ABBV.

OMEX Short Sellers Gasp For Air

After earlier hitting a three-year high of $13.75, OMEX stock was last seen trading 141.7% higher at $9.19, making it the top Nasdaq stock today. The titanic move comes after a Mexican court nullified a denial of an environmental permit application for phosphate extraction from the Don Diego project in Mexico -- a ruling that was in the favor of Odyssey Marine Exploration subsidiary Exploraciones Oceánicas.

Before today's burst, the shares had spent most of the past two years floating between $3 and $5. While bullish traders are cheering, it's worth noting that a substantial 15.3% of OMEX's float is controlled by short sellers, representing a whopping 60 days' worth of pent-up buying demand, at the equity's average pace of trading..

BIDU Bulls Surprised By Broad-Market Headwinds

A sell-off in China-based stocks is hitting BIDU shares today, which have fallen 4.2% to $239.66. While they've given up their recent foothold atop the 50-day moving average, they earlier bottomed just above the 200-day, and remain up 41% year-over-year.

Still, today's price action is likely not what recent call buyers had in mind. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 2.76 for Baidu, a reading that tops 89% of all others from the past year. In short, call buying has been unusually popular in recent weeks.

ABBV Stock Set For Worst Day Ever

ABBV stock is on pace for its biggest one-day loss ever, last seen down 12% at $98.96, making it the worst S&P 500 Index (SPX) performer today. Investors are reacting to news the company won't pursue accelerated regulatory approval for its experimental lung cancer treatment, Rova-T, following disappointing mid-stage trial results. The shares bottomed earlier near the 160-day moving average, located around the $96 mark -- a more than 20% drop from the $120-$125 area that kept a ceiling on the shares during the past two months.

Meanwhile, Deutsche Bank cut its price target on ABBV to $107 from $116 -- but the majority of covering analysts are staying bullish. As it stands now, nine of the 17 brokerage firms tracking AbbVie have it as a "strong buy."

 
 

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