Advantest Could Fall Even Lower Before Rebounding (ATE)

Jun.12.06 | About: Advantest Corporation (ATE)

Shares of Japanese semiconductor test equipment manufacturer Advantest Corp (NYSE:ATE) could trade even lower before there's a rebound in its stock because of a long margin stock balance of 6.8x. Advantest has been getting no help whatsoever from the weak SOX Index and the possibility of another Fed rate hike isn't favorable either. Its ordinary shares peaked on April 7th at 15,360 yen ($134.84) and were down 32% at last Friday's intra-day low of 10,440 yen ($91.65). During the same period its ADSs lost 25.5%.

Advantest did manage to finish in the black in the overnight trading session in Tokyo at 10,920 yen ($95.87) but intra-day it traded much lower at 10,550 yen ($92.62).

Advantest's ADSs are listed at a 4:1 ratio to its underlying shares, thus today's Tokyo close equals $23.97, whereas its intraday low was $23.16. Advantest's ADSs closed Friday at $23.75.

Radio Nikkei (Japanese language source) reports that the word around the Tokyo Stock Exchange is that Advantest could break out any day from its current trading level but new buy interest might be difficult to come by with a 6.8x long margin stock balance.

Advantest Corp ADS (ATE) 1-yr chart: