Aerospace Defense Stock Triples; Senate ZTE Vote Slams ACIA

The U.S. Senate passed a defense bill that could reimpose sanctions on China's ZTE

Managing Editor
Jun 19, 2018 at 3:07 PM
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The stock market is trading significantly lower today as trade tensions continue to escalate. Three individual stocks making notable moves are aerospace defense concern Astrotech Corp (NASDAQ:ASTC), ZTE supplier Acacia Communications, Inc. (NASDAQ:ACIA), and toymaker Mattel, Inc. (NASDAQ:MAT). Below, we will take a closer look at how shares of ASTC, ACIA, and MAT are trading on the charts.

ASTC Stock Has Cleared a Key Trendline

Astrotech stock has nearly tripled today to trade at $5.68 -- and earlier touched a fresh annual high of $8.15 -- after the company's 1st Detect subsidiary said it would submit its explosives trace detectors into the European evaluation process for possible use in airports. ASTC is now 75% higher year-to-date, and is on track to close north of its 200-day moving average for just the second time since November 2016. Some of today's upside is likely been fueled by short sellers, considering it would take over eight days for shorts to cover their bearish bets, at the stock's average pace of trading.

Short Sellers are Targeting Acacia Stock

ACIA is suffering -- down 3.7% at $33.97 -- after the U.S. Senate passed a defense bill that could halt business between domestic suppliers and ZTE, and would reimpose sanctions on the China-based telecom. Longer term, Acacia stock had been rallying off its mid-April lows below $25, but ran straight into short-term resistance at its 80-day moving average.

Short sellers have started ramping up their exposure to the tech stock. Short interest is up 11.9% in the most recent reporting period -- coming off an annual low -- and now accounts for nearly one-quarter of ACIA's available float.

Mattel Stock Suffers After Downgrade

Toymaker Mattel stock is one of the worst performers on the S&P 500 Index (SPX) today, last seen down 4.3% at $17.02, after it received a downgrade at USB to "neutral" from "buy," saying the stock's recent rally has brought it to the top of its near-term range. The brokerage firm also raised its price target by $1 to $18.

After tagging a nine-year low of $12.21 in late April, the stock rallied right up to the $18 mark earlier this week -- home to its 320-day moving average. The stock is now 17% lower year-over-year. Those wanting to bet on more downside from here may want to consider doing so with options. The stock has a Schaeffer's Volatility Index (SVI) of 39%, ranking in just the 16th annual percentile. This reveals that short-term options are pricing in unusually low volatility expectations.


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