Auto Supplier Moving on Tariff Tensions

Shorts are looking at a three week turnaround for ATNX

Managing Editor
May 6, 2019 at 3:18 PM
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Global trade tensions have markets moving significantly lower at midday, while the stock market's "fear gauge," or Volatility Index (VIX), is at multi-month highs. Also making noise today is natural gas name Midstates Petroleum Company Inc (NYSE:MPO), medical research firm Athenex Inc (NASDAQ:ATNX), and automotive parts supplier BorgWarner Inc. (NYSE:BWA). Below we will dive into what is moving shares of MPO, ATNX, and BWA.

Sinking Petroleum Stock Goes Short Sale Restricted

Midstates Petroleum stock has gapped 15.7% lower to trade at $10.79, and is one of the worst stocks on the New York Stock Exchange (NYSE), after the company announced its plans to merge with Amplify Energy in an all-stock deal, leaving stockholders of both companies with 50% of each company when the deal's done. Amplify CEO Ken Mariani has been appointed to lead the combined company, which will be headquartered in Houston and trade on the NYSE. 

As such, MPO has moved onto the short-sale restricted list on the back of today's plunge, as well as to right in line with the 40-day moving average. However, the stock remains up 44% year-to-date, running hot into today with a 14-day Relative Strength Index (RSI) of 83.

Short Covering Amps Up on Underloved Biopharma

Athenex stock is soaring 25% this afternoon, though it earlier topped out at its 200-day moving average, after the oncology name announced its $100 million private placement plan for the sale of its common stock. Three main investors will headline the placement: Perceptive Advisors, Avoro Capital Advisors, and OrbiMed. Following a grim calendar year, today's surge has allowed ATNX to nearly push out of its year-to-date deficit. 

Short interest on ATNX rose just over 3% during the past two reporting periods, and now represents a health 16% of the stock's total available float. At the security's average pace of daily trading, it would take shorts well over three weeks to buy back their bearish bets.

BorgWarner Lands Near Key Trendline

Today's trade and tariff tensions have had a negative impact on auto suppliers as well, including BorgWarner. The car parts supplier is down 1.5% at $40.69 at last check, pulling back to its 100-day moving average for the first time since late March. Ahead of today BWA had been attempting to regain positive momentum, recently topped out at the 320-day trendline and $44 level. Since January, the auto supplier has added 17%.

Options are also looking ideal to BWA traders, with the security's Schaeffer's Volatility Index (SVI) of 28% ranking in the 20th percentile of its annual range. This indicates short-term options are pricing in relatively low volatility expectations.


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