Unusual Options Activity in COIN, WMT stock and DAL

October 19, 2021

Just a heads up. 

I get my data from CBOE / Trade Alert and they have gone through a change in their back end.
This change has caused a hiccup in some areas of my code that I am currently working on fixing.

Specifically, Dividend dates are showing up on days of earnings. And past Earnings Dates are not getting cleaned up. In addition, the Open Interest tool is not updating.

The New Options Chain data is working fine as well as the Unusual Options Activity Scanner. So, that's good. Sorry for any inconvenience.

UNUSUAL OPTIONS ACTIVITY

1. Goldman says a Conviction Buy. But is it? 

2. Bitcoin Lifting COIN. Does it Breakout?

3. Airlines Trading Weak. Call Buying HERE?

Find your own ideas with the Unusual Options Activity Scanner

Let’s get started...


UNUSUAL OPTIONS ACTIVITY WMT STOCK

Goldman says a Conviction Buy. But is it?

Unusual Options Activity WMT 101921

Goldman Sachs Upgraded Walmart to a Conviction Buy this morning: 

“We are adding Buy-rated WMT to the Americas Conviction List and removing Buy-rated TGT, while remaining constructive on fundamentals for both companies into 2022. We believe WMT was one of the strongest stories at the Goldman Sachs 28th Annual Retail Conference in September given the company’s improving ability to grow EBIT dollars along with continued investments, which we think will gain investor attention as the company executes over the coming year.”

We bought WMT September $145 Calls on August 2nd in Winning picks Premium. That worked out well for us. 

In it I outlined the several key areas that are important to the WMT story right now:

  • #1 Walmart+ - This is membership like Amazon Prime.
  • #2 Grocery – This is an area that Wall Street is focusing on with doubt.
  • #3 Walmart Connect – This is their advertising business.
  • #4 3P – This is their third-party marketplace business.
  • #5 International – India and China are growth areas.

Our main reason to get long was positive sentiment in Groceries into earnings. That was a trading opportunity.

The issue with WMT is that not any one small thing will move the stock in a big way. Also, they were a beneficiary of Covid-19, and may need to normalize those gains going forward.

 The long-term chart is trending higher, but not without some hiccups.

What Does the WMT Stock Chart Say?

WMT Chart - Options Activity 101921

This is a weekly chart of WMT stock.

You can see the strong trend of holding, or quickly recouping, the 50dma.

All good. 

On the bear side, the stock has had some trouble at the $150 level.

There is a MACD diversion showing. 

And the 50dma and 250dma is quite wide. If the 50dma can’t hold, there is a lot of room give up on the downside.

The options flow is significant this morning but also gives conflicting signals.

Options Activity in WMT Stock

Unusual Options Activity Scanner WMT 101921

There was unusual options activity in WMT front week options. Right from the get go, the Goldman call had buyers show up in the October 22nd $144-146 Calls as the stock opened up above $145.

While the crowd was racing for those front week options. A large seller was closing out of 6k WMT November $145 Calls at $3.10. These had been bought over the last week near $1.50.

Earnings are due in mid-November.


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UNUSUAL OPTIONS ACTIVITY COIN STOCK

Bitcoin Lifting COIN. Does it Breakout?

Unusual Options Activity COIN 101921

Bitcoin pushing new highs today as futures begin trading. Just wow!

Piper Sandler reiterates Coinbase as overweight:

“First U.S. Bitcoin Futures ETF set to begin trading today. The ProShares Bitcoin Strategy ETF is set to begin trading today after being tacitly approved by the SEC last week. It will be the first bitcoin-related ETF in the United States, and there are ~5 additional bitcoin futures ETFs on a similar path that could begin trading in the next few weeks.”

 The stock is really making a strong move here:

What Does the COIN Stock Chart Say?

COIN Chart - Options Activity 101921

COIN stock has done a lot of work in the $210-$310 range over the last 6 months, but it looks like stock is getting tired of that range.

Before breaking out, it appears there should be a stop sign right around $310.

And usually, that takes an event. Maybe Earnings on November 11th?

The options activity is heavy as you would expect it to be at such an important level.

Options Activity in COIN Stock

Unusual Options Activity Scanner COIN 101921

The option buying was fast and furious on the open as the stock quickly went from $301 to $308. The most active options were the $300 to the $320 Call options. 

Within the hour all of them lost more than 50% from the highs.
Now they are climbing back to those opening levels.

That volatility in the front week options is par for the course. It can be exhilarating or have your head spinning.

Any pullback should see call buyers setting up for a breakout after earnings. Keep an eye out for that.

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UNUSUAL OPTIONS ACTIVITY DAL STOCK

Airlines Trading Weak. Call Buying HERE?

Unusual Options Activity DAL 101321

The airlines and cruise liners hit a brick wall a few weeks ago. I mentioned how weak they looked here. Those stocks are still having trouble today.

Here’s DAL for example:

What Does the DAL Stock Chart Say?

DAL Chart - Options Activity 101921

All was good in late-September for DAL and the rest of the airliners. They exploded higher.
DAL was up almost 20% in 3 weeks right into the end of the quarter.

Since then, it’s been straight down. 

It’s given up the 50dma and the 200dma in the first 3 weeks of October.

The first move likely squeezed the shorts just in time for the real sellers to step in.

I think this is a dangerous spot. $37.50 - $38 is where the support should appear.

But someone has hope right now.

Options Activity in DAL Stock

Unusual Options Activity Scanner DAL 101921

There’s been a consistent Call buyer in DAL for some time. Today, he is moving his strikes lower. He bought 10,000 DAL November $41-43 Call Spreads for $0.73.

Go check out that last post, the fantasy vs reality thinking going on there is still alive and well today. 

Click here if you need more options trading picks with in-depth analysis.

Now go make some money!

Best,
Felix

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