SunPower had been experiencing a "meme stock" rally
SunPower Corporation (NASDAQ:SPWR) stock's short squeeze appears to finally be ending, amid the reignited meme stock craze. The shares are down 27.1% at $3.20 at last glance, after rising roughly 80% over the last two sessions. Today's drop comes after Wolfe Research downgraded the stock to "underperform" from "peer perform," with a price target of $2.
The $3 level, a familiar line of pressure and support since the start of the year, appears to be capturing today's pullback. Since the start of 2024, the SunPower stock shed 34.9%.
Still, 95% of Sunpower stock's total available float is sold short, or seven days' worth of pent-up buying power. Today's drop could've already been in the cards, however, as the security's 14-day relative strength index (RSI) of 92.2 sits firmly in "overbought" territory.
So far today, 30,000 calls and 14,000 puts have been exchanged, which is seven times the overall average daily options volume. The May 3.50 call is the most popular contract, where new positions are being opened.