Q2 STOCKS TO BUY

3 Tech Stocks Surging on Trump's ZTE Tweet

ACIA and LITE stocks are heavily shorted

May 14, 2018 at 10:19 AM
facebook X logo linkedin


Optical component stocks are rallying today, after President Donald Trump signaled support for embattled Shenzhen-based tech firm ZTE. Trump tweeted that he and Chinese President Xi Jinping are "working together to give massive Chinese phone company, ZTE, a way to get back into business, fast." In mid-April, the Commerce Department initiated a seven-year ban for U.S. companies selling to the telecom company, causing ZTE to suspend part of its operations.Among those making big moves higher are Acacia Communications, Inc. (NASDAQ:ACIA), Lumentum Holdings Inc (NASDAQ:LITE), and Oclaro Inc (NASDAQ:OCLR).

Acacia Communications Shorts Dodge a Bullet

Acacia Communications gets about 30% of its revenue from ZTE, and today the shares have shot up 11.4% to trade at $35.08. While the stock still has yet to close its April 13 bear gap -- which sent the shares to a record low of $24.72, and would take a breakout above the round $40 mark to fill -- they are trading above $34-$35 range, which had served as a floor from mid-November through early April.

A handful of short sellers cashed out during the stock's recent technical troubles, too. Short interest on ACIA fell 7.1% from the April 15 to the May 1 reporting periods, and is now docked at 5.98 million shares. However, this still accounts for almost 25% of the stock's available float.

Lumentum Stock Squeezes Shorts

ZTE sales reportedly account for roughly 5%-10% of Lumentum revenue, and the stock is trading 3.8% higher at $65.50 after Trump's tweet. After skimming the round $50 mark in late April, the shares gapped higher on a positive earnings reaction, and are now trading above recent congestion in the $64 area.

LITE is maintaining a nearly 33% year-to-date lead, and shorts may be feeling the pressure. The 10.95 million Lumentum shares sold short represent 18.3% of the stock's available float, or 4 times the average daily pace of trading. A continued surge could shake some of the weaker bearish hands loose, creating even bigger tailwinds for the security.

Oclaro Stock Rallies Into Key Technical Level

Oclaro stock is up 6% to trade at $9.08, but is running out of steam near $9.30 -- home to its pre-bear gap levels from mid-April. The company brings in almost 20% revenue from sales to ZTE, and is currently being bought out by Lumentum in a cash-and-stock deal valued at $1.8 billion, or $9.99 per OCLR share.

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter