Snap Stock Winning Streak at Risk

Oppenheimer downgraded BIDU stock and removed its price target

by Karee Venema

Published on Apr 10, 2019 at 3:16 PM

The U.S. stock market is mixed following the release of the Fed's March meeting minutes. A number of individual stocks are making notable moves, including Snapchat parent Snap Inc (NYSE:SNAP), neurotechnology name Helius Medical Technologies Inc (NASDAQ:HSDT), and Chinese internet concern Baidu Inc (NASDAQ:BIDU). Here's a quick look at what's moving the shares of SNAP, HSDT, and BIDU.

Snap Stock Retreats on eMarketer Outlook

eMarketer lowered its growth outlook for Snapchat, projecting U.S. monthly user growth will decline in 2019 and be flat in 2020. In reaction, Snap stock is trading down 4.8% today at $11.76. Heading into today, the equity was on a four-day winning streak, sparked by a busy stretch of bullish analyst attention.

Even with the stock up 119% year-to-date, most brokerage firms are skeptical. While 20 of the 23 covering analysts maintain a "hold" or worse recommendation on SNAP, the average 12-month price target of $9.42 is a discount to current trading levels.

Helius Medical Technologies Stock Rewards Shorts

Helius Medical Technologies shares have plummeted 65.4% to trade at $2.15, earlier bottoming at a record low of $2.01. The stock is reacting to news the company's lead product -- the portable neuromodulation stimulator (PoNS) failed to gain marketing clearance from the U.S. Food and Drug Administration (FDA), with the regulatory agency also denying "De Novo classification."

While short sellers are sidelined today with HSDT on the short-sale restricted list, they're likely cheering today's bear gap. Short interest accounts for nearly 16% of the stock's available float, or about 46 times the average daily pace of trading.

Analyst: Baidu Stock Likely to Be Range-Bound

Oppenheimer downgraded Baidu stock to "perform" from "outperform," and removed its $205 price target. Analyst Jason Helfstein said increased spending by the company this year will likely keep the shares range-bound. In response, BIDU stock is down 2.5% at $176.42, set for back-to-back losses for the first time since late March.

Looking closer at the charts, the shares rallied hard into April, stringing together a seven-day winning streak that was snapped yesterday. This run brought the stock smack into its 160-day moving average, a trendline that's ushered the shares lower since August.

BIDU options traders have been betting on more upside. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 4.10 ranks in the 100th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

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