Penny Stock Stays Hot on Orders Update

RADA Electronic has had a good year on the charts

RADA Electronic Ind. Ltd. (NASDAQ:RADA) has had a big year on the charts, with shares of the defense specialist rallying from $2.58 at the end of 2018 to trade as high as $5.80 last month. RADA stock closed yesterday at $4.72, putting its year-to-date lead at 83%, and the shares were seemingly finding support near the uptrending 50-day moving average. Now, the equity is on the rise again thanks to the company's update this morning.

Specifically, RADA said it received $6 million in new orders for its radar systems in August and September. In response, the security is up more than 6% at $5.00, and this price action could be great news for the few traders who've targeted call options. For instance, peak open interest is at the October 5 call, where data confirms heavy buy-to-open activity. In other words, traders were betting that the stock would topple the $5 level ahead of expiration on Oct. 18.

We'll have to see if this technical and fundamental success brings along any attention from Wall Street analysts, because as of now they've mostly ignored the stock. In fact, just one brokerage firm is in coverage, though it rates RADA Electronic a "buy" with a $7.50 price target -- territory not charted since the end of 2014.