One Apple Supplier Wall Street Isn't Selling

The sell-off in Apple (AAPL) stock is the talk of Wall Street today, and the pain is especially real for a number of the tech giant's suppliers. But while many investors are distancing themselves from this part of the market, we noticed one Apple partner that multiple analysts have already come to support of: optical networking specialist Lumentum Holdings Inc (NASDAQ:LITE).

For instance, Northland Capital came out and reiterated its "outperform" designation and $60 price target for LITE stock. D.A. Davidson made a similar move, reaffirming its "buy" rating and ambitious $89 price target. Both these firms indicated that iPhone weakness had already been priced into the shares since the company cut its outlook back in November.

That's not the end of the positive attention, however, as Needham also said it's keeping its "strong buy" rating on Lumentum, though it did lower its price target by $10 to $65. Still, these bullish endorsements haven't helped LITE avoid the selling across the tech sector, with the shares last seen down 7.4% at $39.44.

Longer term, the security has been in a series of lower highs since its late-August peak near $70, trading below its 50-day moving average since Oct. 22. The shares bottomed right at $37 after the company's weak forecast in November, and subsequent pullbacks have met a floor just above this level.

But options traders may also be taking bullish positions on Lumentum. Call volume today is almost twice the pace expected for this point, and the most popular contract is the January 2019 46-strike call. New positions are being opened here, and anyone buying the call would be betting on LITE stock moving back above $46 -- a 16.6% premium to current levels -- by the close on Friday, Jan. 18, when the contracts expire.