This morning the market continued to the downside for the third straight day, but pared losses in the afternoon to limit the damage. The S&P, Dow and Nasdaq fell 0.32%, 0.59% and 0.20%, respectively. The S&P tested the vicinity of the 21-day EMA before bouncing, and the doji candlestick could be evidence that recent downside momentum could be slowing.
While the indices remained lethargic, select tech names stood out to the upside.
Tesla (TSLA), which was Marc Sperling’s Trade Idea of the Week, jumped 16.53% after the German equivalent of the US Federal Highway Safety Administration cleared the Model S of any defect that could be blamed for recent fires in the vehicles. After a recent barrage of negative press regarding Model S fires had driven the stock sharply lower, the news was enough to trigger a massive short squeeze.
Apple (AAPL) staged a Red Dog Reversal yesterday, a signal that it could be due for a rest or slight correction. However, overnight news revealed the Black Friday iPad sales were much better than expected, which triggered a gap and go in the stock. AAPL finished the day on highs up 2.74% and back above yesterday’s high.
Individual news pieces also triggered volatility in several other names.
Molycorp (MCP) went from negative to positive to tack on a third straight day of gains after the company’s CEO was quoted as saying he believes the company will become profitable in 2014. MCP finished up 2.81%.
Herbalife (HLF) broke out to new highs with a 6.68% gain after a Belgian court overturned a previous ruling that the company was a pyramid scheme. In the new ruling, the judge said the Herbalife business model does not violate any laws in Belgium, which is in line with previous rulings in other countries. Infamous short-seller Captain Ahab Bill Ackman maintains that he will go to the end of the earth and back to prove Herbalife is a predatory pyramid scheme, and thus is a zero.
Gogo (GOGO) tacked on another 9.55% today to break out to new highs. The breakout follows yesterday’s igniting bar that resulted from an afternoon news that GOGO has been cleared to provide in-flight Wi-Fi on international flights, rather than just domestic flights in the US.
3-D Systems (DDD) enjoyed a wild ride today after hedge fund manager Whitney Tilson labeled the stock “one of the great shorts in a market of massive stupidity.” After an initial plunge on the headline, the stock was able to recover back into positive territory. While Tilson, who doesn’t exactly have a sterling record when it comes to commentary on potential short opportunities (NFLX), didn’t offer any new or groundbreaking commentary, he brought attention to the fragile growth story that is the 3-D printing sector and 3-D systems in particular.
Disclosure: No relevant positions