Bull Notes, Trade News Boost iQiyi Stock

Outperforming IQ is heavily shorted

Feb 25, 2019 at 9:11 AM
facebook twitter linkedin

HSBC raised its price target on iQIYI Inc (NASDAQ:IQ) stock to $25 from $20 overnight. Plus, CMB International said it was "bullish on iQiyi's subscription growth and margin improvement," and made note of the Beijing-based streaming name's "strong content pipeline, innovative ads, and manageable content cost with favorable licensing pricing trends." 

This, along with upbeat developments on the U.S.-China trade front, have shares of IQ up 6.8% in electronic trading. This positive price action would just echo the stock's recent trajectory, with iQiyi adding 86.3% year-to-date. What's more, the shares closed Friday above their 160-day moving average for the first time since the trendline formed in mid-November, gapping 21.7% higher to settle at $27.70 on the back of a strong fourth-quarter earnings report.

This upside certainly has short sellers on edge. Short interest on IQ rose 6.1% in the two most recent reporting periods to 46.87 million shares. This represents 18.5% of the security's available float, or more than a week's worth of pent-up buying demand, at the average pace of trading.

Despite IQ's impressive start to 2019, just three brokerages currently cover the Chinese stock, with two maintaining a "strong buy" rating and one a tepid "hold." A round of bullish initiations could create tailwinds for the outperforming equity. Price-target hikes could draw more buyers to the table, too, considering the average 12-month price target of $25.82 is a discount to current levels.




These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!


Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners