There's pessimism among analysts and short sellers to be unwound
The shares of FireEye Inc (NASDAQ:FEYE) are up 2.5% to trade at $18 this morning, after SunTrust Robinson raised its rating to "buy" from "hold." The analyst in coverage -- while also upping its price target to $22 from $15 -- noted the Middle East tensions will lead to more government and private sector spending on cybersecurity.
Should today's gains hold, FEYE is poised to start 2020 undefeated with four straight wins. Plus, that new price target sits in territory not achieved since late 2015. The $13 level contained the shares' bottom in August, and the subsequent rise has found support at their 50-day moving average.
There's still pessimism surrounding FEYE that can be unwound should the cybersecurity name stay hot. There are 17 brokerages covering the stock and eight rate it a tepid "hold." Although short interest fell by 15.7% in the two most recent reporting periods, the 13.88 million shares sold short still accounts for a healthy 6.6% of the equity's total available float, and 4.1 times the average daily trading volume.
And in the options pits, near-term traders are put-heavy on FEYE, based on the Schaeffer's put/call open interest ratio (SOIR) of 0.99, which ranks in the 96th annual percentile, so a shift in sentiment among these speculators could also buffer FireEye's position on the charts.