American Outdoor Brands Stock Pops on Rare Bull Note

X hit a three-year low earlier

Oct 9, 2019 at 3:06 PM
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The U.S. stock market is soaring today on positive U.S.-China trade buzz. Among individual stocks making big moves is travel name American Airlines Group Inc (NASDAQ:AAL), gun maker American Outdoor Brands Corp (NASDAQ:AOBC), and steel producer United States Steel Corporation (NYSE:X). Here's a quick roundup of what's moving the shares of AAL, AOBC, and X.

American Airlines Rallies Into Key Trendline

American Airlines stock is up 3.1% today at $27.06, after the airline carrier narrowed its third-quarter pre-tax margin expectations and total revenue per available seat mile guidance. The company also canceled all flights using Boeing's (BA) 737 MAX plane through Jan. 15. AAL earnings are due out before the market opens on Wednesday, Oct. 23.

The equity is now up 10.4% from its Oct. 3 dip below $25, but is running out of steam near its 50-day moving average, which contained a mid-September rally, too. Options traders today are betting on AAL to break out above this trendline, though.

The November 26 call is most active today, and it looks like traders are purchasing new positions here for a volume-weighted average price (VWAP) of $2.00. This would make breakeven for the call buyers at the close on Friday, Nov. 15, $28 (strike plus premium paid).

Craig-Hallum is Bullish on AOBC Stock

Craig-Hallum upgraded American Outdoor Brands to "buy" from "hold," saying the stock is attractively priced at current levels. The brokerage firm also cited a number of potentially positive short-term catalysts, including increased gun regulation ahead of the 2020 U.S. presidential election. In reaction, AOBC stock is up 7.8% to trade at $6.48.

Today's pop is being contained by the equity's 40-day moving average, and AOBC remains 49% lower year-to-date. As such, there's plenty of skepticism priced into the gun stock. While three-quarters of covering analysts maintained a "hold" recommendation prior to today, a healthy 10.6% of the security's float is sold short.

U.S. Steel Stock Slips Into Single-Digit Territory

U.S. Steel stock hit a three-year low of $9.93 earlier, last seen down 7.8% at $10.17. This follows news the company tapped current Chief Supply Chain Officer Christine Breves to replace Kevin Bradley as chief financial officer next month, and said it will aim to cut fixed costs by roughly $200 million by 2022.

X has been a long-term laggard on the charts -- down 44% year-to-date -- with last week's M&A-related pop cut short by its 50-day moving average. Some options traders are eyeing a quick bounce for the steel stock. With total options volume running at two times the average intraday clip, the weekly 10/11 10.50-strike call is popular. New positions are potentially being bought here for a VWAP of $0.13, which would make breakeven $10.63.


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