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No bounce expected for Hollysys

Hollysys Automation Technologies has been plunging along with many other Chinese stocks, and investors don't expect a rebound in the near term.

The Beijing-based company makes controls for factories, power plants, and railroads. Its last earnings report on May 9 appears to have shown stellar results, with revenue climbing 67 percent, profit margins widening and management declaring a promising future of business growth.

Nonetheless, HOLI is down 30 percent since the news came out, with about half that drop occurring this week. Yesterday the shares plunged another 9.52 percent to $7.89.

Investors sold about 3,000 June 5 calls for $2.90 to $3.80 against open interest of just 414 contracts. The transactions locked in exit prices on the share of $7.90 to $8.80, and reflected a belief that the stock will remain around its current levels or decline further in the next month.

Overall option volume in HOLI was 56 times greater than average in the session.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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