The Battery Stock of the Future… or Not!

September 2, 2021

Unusual Options Activity  090221 - Clean Energy Cartoon

We hear a lot about Clean Energy and how the world will change.

I thought this was a good “grounded” piece. Here’s a small clip: 

The billions of batteries required to store all this electrical energy must also be replaced every decade or so, and recycling batteries is difficult and costly. There is nothing remotely "green" about mining the planet for lithium, cobalt, etc. or manufacturing billions of batteries.”

The article links to a report that I didn’t read yet (because it’s long, so I bookmarked it), but also looks interesting to gauge the costs and the limits of the Earth and Clean Energy. 

Let’s jump into today’s action…

UNUSUAL OPTIONS ACTIVITY

1. THIS Stock Explodes if Nuclear is the Solution

2. What’s Wrong with THIS Sector?

3. The Battery Stock of the Future… or Not!

Let’s get started...


UNUSUAL OPTIONS ACTIVITY CCJ STOCK

THIS Stock Explodes if Nuclear is the Solution

UOA Trade Idea CCJ 090221

The “clean energy” trend needs enormous of amounts of power to make everything clean. Right now, the paradox is that we are using fossil fuels to drive the trend. At some point, that’s not supposed to be the answer. 

Winning Picks Premium members have been long Cameco (CCJ) since last year. Why?

CCJ stock is in the Uranium business.

Uranium = Nuclear Energy = the “cleanest” solution available.

But it also gets environmentalists heated up.

The question is: When do we know if Uranium will be the solution?

We don’t. And that’s why we play CCJ options.

Options help us handicap the “what if?”

Here’s the Uranium chart…. 


What Does the CCJ Stock Chart Say?

CCJ Chart 090221

CCJ stock had a rough summer, but recently woke up again. 

After a move from $9 to $22, you need to expect some consolidation. Nothing goes straight up. 

There’s been a very large player in CCJ stock options for a year. As of recently, he had been in September options.  

We anticipated him rolling out for more time and decided to play CCJ stock options in July and bought the December expiration.

CCJ Stock Options Volumes

Unusual Options Activity CCJ 090221

Today, he continues to roll his CCJ September options to December options.

It appears he is selling his CCJ September $19, $20, and $26 Calls and his upside December $30 Calls to get into 16,000 CCJ December $23 Call options. 

If you stick $30 into the Target Stock Price, you get the pointer to land on the $23 strike.

Take a look at that chart again…

$9 to $22 is $13.

$13 + $16.50 … hmmm, $29.50. 

Sounds about right!


UNUSUAL OPTIONS ACTIVITY V STOCK

What’s Wrong with THIS Sector?

UOA Trade Idea V 090221

The big credit card companies like V, MA, and AXP are under some pressure today. For V and MA, it’s been several weeks now. 

I don’t see much news.

Take a look at this chart….

What Does the V Stock Chart Say?

V Chart 090221

The stock touched its 200dma today and found a little support.

That $219 level catches my eye as a decent pivot level that I want to see hold.

On this move lower, we’re seeing Unusual Options Activity in V. 

V Stock Options Volumes

Unusual Options Activity V 090221

The highest options volume is mainly in the Calls (70% Calls vs 30% Puts).

Someone bought 15k V November $230 Calls paying approximately $6.90.

The buyer is looking for $250-255, which coincides with the recent $252.50 high in the stock.

Just a thought on the weakness…

Perhaps the end of the eviction moratorium coupled with the end of certain unemployment benefits might raise credit card default rates in the future. 

Will that become the narrative over the next few months? 


UNUSUAL OPTIONS ACTIVITY QS STOCK

The Battery Stock of the Future… or Not!

UOA Trade Idea QS 090221

I think Quantumscape (QS) ranks in the top 10 “Fantasy” names out there.

Long term, it’s either going to be the winner in a multi-trillion dollar Battery industry or the technology is way overhyped and QS is a dud.

We play in the short-term.

So, looking at this chart and today’s action, I think QS is interesting…

What Does the QS Stock Chart Say?

QS Chart 090221

The “Momentum Mountain” has made its way back to the valley.

The stock has been a disaster for the dreamers.

But QS has traded between $20-25 for two months now and is now trying to retake the 50dma.

There’s Unusual Options Activity in the name that needs some attention…

QS Stock Options Volume

Unusual Options Activity QS 090221

An options buyer stepped in to grab more than 15,000 QS September 24th $27 Calls. While they are the most active options, the options strike price is outside the range where the Top 1% would normally buy options.

And the choice of Expiration Dates is odd. Earnings are in October. 

So, why September 24th and why that strike? 

Not sure, but it has my attention. 

Look, at one time not too long ago, QS stock was valued at more than $60 Billion.

The fantasy was that it was on its way to $1 Trillion.

That’s almost a 16 to 1 payout.

With a market cap of $9bn, QS stock would be more than a 100 to 1 payout at a $1 Trillion Market Cap. 

The market is simply saying that their new battery technology has very little chance of working.

To give you some context, the New York Knicks are 40 to 1 to win the NBA Championship this year.

It ain’t happening.

The Charlotte Hornets are 100 – 1 to win the NBA Championship.

That definitely ain’t happening. 

QS stock is one of those names that should be played for +10 years or 10 weeks. 

You choose.

Now go make some money!

Best,
Felix

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