U.S. Blacklist News Destroys AMBA Stock

While AMBA landed on the SSR list today, options players are still piling on

Digital Content Manager
Oct 8, 2019 at 11:54 AM
facebook X logo linkedin


GoPro supplier Ambarella Inc (NASDAQ:AMBA) is sinking today, as the Trump administration continues to blacklist even more Chinese companies, including some of the country's top AI startups. The semiconductor sector has been hit especially hard by the news, dragging down AMBA, which has lost 11.2% to trade at $50.81 -- on pace for its lowest close in over a month 

While the chip maker is still trading higher than its pre-bull gap levels, it just breached its 40-day moving average for the first time since said bull gap back in late-August. In fact AMBA has now shed almost 25% off its Sept. 11 year-to-date peak of $67.15. Now, the shares are testing support at the 80-day moving average. 

AMBA Oct 8

Stifel was quick to chime in, cutting its price target to $54 from $61. This puts the consensus 12-month price target at $57.44, which sits at a 12.8% premium to current levels. It looks like the brokerage bunch has already been cautious around the security, with the majority in coverage giving AMBA a "hold" or worse rating. 

Short sellers are likely cheering today, despite AMBA landing on the short-sale restricted (SSR) list. The 4.24 million shares sold short make up a solid 13.5% of the stock's available float, and would take over six days to cover at the equity's average pace of trading. 

This hasn't stopped options traders from piling on, though. So far, 5,210 puts and 7,361 calls have exchanged hands, 17 times what is typically seen at this point. Most of this action is taking place at the weekly 11/15 series, where positions are being opened at the 57.50- and 62.50 strike calls. This suggests that traders could be expecting the shares of AMBA to rebound from today's dip. On the other hand, the weekly 11/15 50-strike put is also seeing some attention today, with positions being opened here as well. 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI