Huge Volume Spike in LED Stocks: It Looks Real This Time (CREE, VECO, AIXG)

Posted in block volume, General, Options 
November 5th, 2011

On Friday there was explosive volume in the LED stocks on news that China is going to be phasing out larger incandescent bulbs over the next year and smaller bulbs over the next three years.  The volume was three-times and four-times normal in many of these stocks.  What is different about the news is that this could be a game-changing event for the years ahead even if the near-term issues remain.  The lows may have now been seen in these shares and this time the volume spike looks real.

Cree, Inc. (NASDAQ: CREE) closed up 9.65% at $30.57 on nearly 3-times normal volume with 9.3 million shares traded against a 52-week range of $23.03 to $31.34.

Veeco Instruments Inc. (NASDAQ: VECO) closed up 10.15% at $29.20 on about 3.3-times normal volume with 7 million shares traded against a 52-week range of $23.06 to $57.67.

Aixtron SE (NASDAQ: AIXG) closed up 9.97% at $16.43 on more than 4-times normal volume with 2.11 million shares traded versus a 52-week range of $12.49 to $44.96.

The full analysis, details of the phase-out, and 4 or 5 other LED shares on the move are available here at 24/7 Wall St.  A Veeco stock chart from stockcharts.com has been provided below.  Stock option trading was also extremely elevated in all three names, particularly in the speculative call options.

JON C. OGG

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