Unusual Options Activity CRM, TGT, CCL

August 18, 2021

AMZN FB GOOGLE AAPL Antitrust

Amazon has shown considerable weakiness in August after earnings. Their report wasn’t good enough for investors, but the trading action seems like there’s more to the story.

This article came across the tape this morning and I couldn’t help myself think… Does someone have a good read on the government’s next big move? 

“We’re reaching out to a small group of our sellers to make them aware of a package of legislative proposals, currently in Congress, that is aimed at regulating Amazon and other large technology companies,” the email states. “It is early in the process and the bills are subject to change, but we are concerned that they could potentially have significant negative effects on small and medium-sized businesses like yours that sell in our store.”

AMZN, AAPL, FB, and GOOGL are in the governments’ crosshairs. These 4 names make up 14.5% of the S&P500.

At some point that will matter... At some point.

Here’s 3 interesting Unusual Options Activity trades going on today…

UNUSUAL OPTIONS ACTIVITY

1. Gotta Love WMT, What About THIS Stock?

2. THIS Stock is Definitely Picking Up the Slack

3. Re-Opening Stock That’s Hanging By A Thread

Let’s get started...


UNUSUAL OPTIONS ACTIVITY TGT

Gotta Love WMT, What About THIS Stock?

Target Trade Idea

TGT earnings were good, just not enough to get the stock moving higher. Here’s a good summary of their report. I like the angle of the CFO:

“Typically in retail, if you saw a large, mature company like ours growing at the rate we’re seeing today, you’d assume we were comping over soft numbers from the prior year,” Chief Financial Officer Michael Fiddelke told analysts and investors. “Instead, we’re comping over a year of record growth in 2020 on both the top and bottom lines.”

Stocks to go up forever… 

TGT Stock Chart 081821

Although TGT definitely didn’t get that memo over the last year and a half. I suspect we start to see the 50 and 200 dma begin to converge a bit. Maybe 3 months or so right into the holiday season.

Today, we’re seeing some Call Selling, which indicates range-bound action to digest that incredible move higher.

TGT Unusual Options Activity 081821

Specifically, the customer sold 14k TGT September $270 Calls at around $1.26.  The seller is likely a holder of the stock and wants to take in some premium as he peels off a % of what he owns. 

Lastly, I highlighted the TGT vs WMT two weeks ago:

“One last point, it’s rare to see WMT up and TGT down. Frankly, it’s rare to see TGT down! Take a look at that TGT chart. Wow!  Anyways, at some point the big guys pare down a position that is up like that.  Where might the TGT-dollars go? Why not WMT?”

I think that will be in play for the next few months.


UNUSUAL OPTIONS ACTIVITY CRM

THIS Stock is Definitely Picking Up the Slack

CRM Slack Trade Idea

Salesforce (CRM) is a bet on the future of a hybrid work model. Keep in mind CRM has been a Wall Street darling for a while… until December. Wall Street didn’t like CRM’s purchase of Slack and punished the stock for it.

So, while the market screamed higher over the last 8 months, CRM was trying to close this transformational deal they made.

Now that it’s done, the company will re-pitch the new CRM story to the big investors. I suspect we will start seeing a flood of these type of sales announcements over the next few months:

“Salesforce today announced the first set of its features that integrate Slack’s products, including Sales Cloud, Service Cloud, Marketing Cloud, and Tableau.” 

And by the way, there’s not too many Salesmen better than CRM CEO Marc Benioff

The question is: Will the institutions come back? 

Maybe it's already happening….

CRM Stock Chart 081821

The chart looks constructive, and $285 looks like the first real test to the upside. Call buying suggests a breakout through that level.

CRM Unusual Options Activity 081821

There is some Unusual Options Activity in CRM September Calls today. It appears someone rolled up 2k of their CRM September 17th $250 Calls to the $260s. Then bought more $260s. The $280s also appear to have been bought 3,000x right out of the gate. 

Earnings are next week. 


UNUSUAL OPTIONS ACTIVITY CCL

Re-Opening Stock That’s Hanging By A Thread

Covid cruise ship

When I think of cruise liners, I think of retired folks looking to just get away, drink, and hit the casinos. Just to check I googled and found this:

“According to the Cruise Lines International Association (CLIA) Global Passenger Report, the average age of cruise passenger was 46.7 years old – holding steady from the previous two years. However, 40 to 49-year-olds make up only 15% of all cruise passengers for that year. This is probably due to a handful of families with small children lowering the average age. The median age was between 60 and 69-year-olds, with a full 19% of cruisers falling under this demographic.

So, it’s hard for me to be long these cruise liners when you have a Covid variant busting through any vaccine shield and your main customer is frightened to be exposed. Especially when you see these headlines:

CCL News Headline 081821
“Cruise ships are often settings for disease outbreaks because of their closed environment and close contact between travelers from many countries, according to the CDC. An extensive list of preventative measures recommended by the agency to cruise ship operators includes minimizing the number of crew members sharing a cabin, eliminating in-person or group staff meetings and practicing social distancing.”

The chart reflects some of this skepticism…

CCL Stock Chart 081821

Look, $24.50 seems to be a pivotal level in the stock. CCL is currently below that and also below the 50 and 200 dma. To make matters worse, I see an ABCD down set-up (Can you spot it?), that is signaling a sharper mover lower. And lastly, I don’t like that 50 dma pointing down.

That said…

Someone made the effort to roll down their Calls today for next week…

CCL Unusual Options Activity 081821

9,000 CCL August 27th $23-24 Call Spreads were bought this morning. Notice the Open Interest, the buyer seems to be adjusting his risk-reward.

The question is: Why August 27th?

Now go make some money!

Best,
Felix

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