Thanks to a recent spate of negative analyst notes, the shares of semiconductor firm Altera Corporation (NASDAQ: ALTR) slipped several points lower last week -- adding to the stock’s latest decline. From a longer-term perspective, the security had spent the past few weeks challenging resistance at its 10-day and 20-day moving averages; however, ALTR is now several points beneath this short-term duo. Furthermore, these trendlines recently completed a bearish cross, suggesting that ALTR's technical troubles could continue in the near term.
As alluded to above, the stock’s recent fall from grace was triggered by a round of bearish brokerage attention. More specifically, BMO last week cut the semiconductor sector to "underperform" from "marketperform," citing rising inventories and weakening demand. Meanwhile, analysts at S&P Equity followed suit on Friday, cutting ALTR from "buy" to "hold."
All in all, Zacks reports that 10 brokerage firms now deem ALTR a "hold," compared to 11 "buy" or better ratings and not a “sell” in sight. Going forward, ALTR could be vulnerable to additional downgrades from this bullish bunch, given the recent trend.
Elsewhere, option players remain optimistic toward the semiconductor stock. The equity’s Schaeffer's put/call open interest ratio (SOIR) -- which measures put open interest relative to call open interest among options with less than three months until expiration -- stands at 0.67, in the 14th annual percentile. In other words, short-term option players have been more optimistically aligned toward the shares just 14% of the time during the last year.
Should the recent barrage of analyst downgrades prove to be just the tip of the iceberg, ALTR could suffer even more on the charts. An exodus of the bullish holdouts among the brokerage bunch, or an unwinding of optimism in the options pits, could translate into additional technical speed bumps ahead.
Disclosure: Sarah Wasserman has no financial interest in any of the equities or products mentioned