Software Stock Stumbles After Downgrade

SE has been an outperformer on the charts in the last 12 months

Deputy Editor
Jun 25, 2024 at 9:09 AM
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The U.S.-listed shares of Sea Ltd (NYSE:SE) are 4.2% lower premarket, after JPMorgan Securities downgraded the Singapore-based e-commerce stock to "neutral" from "overweight" and lowered its price target to $78 from $84. The analyst in coverage cited competitive pressures from firms such as Tokopedia and Temu.

Sea stock is waltzing into today's session as a massive outperformer. The equity sports an 87.4% year-to-date lead and is up nearly 30% higher over the last 12 months. The security yesterday closed at a more than 52-week high of $76.60, but is today set to fall below its 10-day moving average for the first time since the beginning of June.

Prior to today, SE's 14-Day Relative Strength Index (RSI) sat all the way up at 89, firmly in oversold territory, so today's pullback may have been in the cards already. 

Now could be a good time to weigh in on SE's next move with options. Sea stock is seeing attractively priced premiums at the moment, per its Schaeffer's Volatility Index (SVI) of 33%, which sits in the lowest possible percentile of its annual range. 


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