When a reversal reverses

Traders and investors who weren’t expecting FormFactor (FORM) to fall roughly 20% in early trading on Thursday didn’t have to wait very long for a little relief.

The semiconductor support stock opened near the day’s low, but cut that loss in half within five minutes. It spent most of the day roughly 5%-13% lower, and edged consistently higher toward the end of the trading session:

Many bulls likely felt good about the fact that the stock ultimately closed down only 6.8% and in the upper half of the day’s range, since the intraday momentum certainly swung in their favor.

But the stock’s history suggests traders looking for additional near-term upside may have wanted the stock to end Thursday a little closer to the day’s low. Yesterday’s relatively strong closing price was somewhat unusual since, of the 93 other times FORM fell 7.5% or more intraday (while also trading to its lowest level in at least 10 trading days), it closed in the upper half of the day’s range only 26 times.¹

The following chart shows the stock’s median returns five, 10, and 15 trading days after these higher-closing days were negative, while the median returns after the days that closed in the lower half of the day’s range were positive:

In other words, when FORM had a larger-than-average intraday sell-off, the stock tended to bounce more over the next few weeks if it ended the sell-off day “weak” (in the bottom half of the range) rather than “strong” (in the top half).

Today’s numbers include (all times ET): Employment Report (8:30 a.m.), consumer sentiment (10 a.m.).

Today’s earnings include: Avantor (AVTR), Cboe Global Markets (CBOE), Ubiquiti (UI).

Click here to log on to your account or learn more about E*TRADE's trading platforms, or follow the Company on Twitter, @ETRADE, for useful trading and investing insights.

¹ All figures reflect FormFactor (FORM) daily prices, 2003-2025. Supporting document available upon request.