Unusual Options Activity in PLUG, AAPL stock and DAL

October 13, 2021

Unusual Options Activity CPI heat map 101321

I like looking at visuals.

Today, Bank of America released a good heat map of core CPI components year-over-year.

Green means the highest price changes. Red means the lowest prices changes.

It’s easy to see the trend over the last year as the colors go from red and orange to green and light green.

Wow!

UNUSUAL OPTIONS ACTIVITY

1. Earnings & Revenues Beat, Yet Stock Down?

2. Can the Momentum Continue HERE?

3. Bad News is Good News In AAPL?

Find your own ideas with the Unusual Options Activity Scanner

Let’s get started...


UNUSUAL OPTIONS ACTIVITY DAL STOCK

Earnings & Revenues Beat, Yet Stock Down?

Unusual Options Activity DAL 101321

Delta announced great earnings and revenue numbers. The problem now is jet fuel prices are going up:

“While demand continues to improve, the recent rise in fuel prices will pressure our ability to remain profitable for the December quarter… As the recovery progresses, I am confident in our path to sustained profitability as we continue to provide best-in-class service to our customers, strengthen preference for our brand, while creating a simpler, more efficient airline.”

As bullish as the CEO tries to be, the market didn’t like that and hit the stock price.

What Does the DAL Stock Chart Say?

DAL Chart - Options Activity 101321

DAL recently recaptured the 50 and 200dma. It might give all of that back today.

The line in the sand seems to be $37.50.

The stock is simply digesting a very large move from the disaster last year.

That said, the chart looks weak to me. The stock price u-turned before re-taking $48. That would have been bullish.

The options are telling a similar story.

Options Activity in DAL Stock

Unusual Options Activity Scanner DAL 101321

There’s unusual options activity in DAL today, however, I think it is more risk reducing than actual “let’s go get some leverage” trading.

UAL, AAL, and LUV report next week.

Keep in mind, the fantasy vs reality thinking going on here.

Fantasy = When Covid is done everyone will fly again, and UAL will print money.

Reality = At some point, this must not only come true, but exceed everyone’s imagination. And remember, the last two years have made serious dents in the balance sheets of these travel companies (i.e. more debt, share dilution).

And the same goes for the cruise liners.

There will be trading opportunities, but these stories still have a long way to go.


UNUSUAL OPTIONS ACTIVITY PLUG STOCK

Can the Momentum Continue HERE?

Unusual Options Activity PLUG 101321

PLUG is up almost 40% in a week.

Morgan Stanley raised their price target from $35 to $40 this morning, stating:

“With the announcement of several strategic partnerships, ~$4bn of cash and cash equivalents on its balance sheet, accelerating revenue growth and the potential for significant upside from legislative support, we believe PLUG is particularly well positioned at the outset of a significant transition point in energy,”

The stock is up over 12% … today!

Is it too late to get in?

What Does the PLUG Stock Chart Say?

PLUG Chart - Options Activity 101321

It ain’t easy recapturing that feeling of early 2021.

Most of the time, every new attempt to create the next "mountain" is a mirage. The logic is simple. There’s a lot of stock supply above you.

PLUG stock has made the first positive step… take back the 50 dma.

The next step is that 200 dma, which is hovering over the support/resistance level dating back to the start of the “mountain” climb.

Will it keep going?

I’m skeptical and don’t like chasing 40% moves. That’s just me.

Others love the momentum game.

Options Activity in PLUG Stock

Unusual Options Activity Scanner PLUG 101321

The unusual options activity scanner is showing PLUG running 3 to 1 Calls to Put Options. It’s heavily centered in the weekly options.

Out of the gate, there were buyers of the PLUG October 15th $32 to $35 Calls. The Risk-Reward Breakeven Prices ranged from $34.50 to $37.

You get the Plug Symposium tomorrow:

“The 2021 program will explore the micro and macro trends influencing the widespread adoption of green hydrogen to accelerate the global energy transition. You will hear industry thought leaders discuss the role of hydrogen and fuel cell solutions in decarbonizing multiple sectors including power, industrial and transportation.”

Short-term momentum is tricky.

Nothing feels better when it works.

But you pay a lot for the options, which makes it painful when it doesn’t.

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UNUSUAL OPTIONS ACTIVITY AAPL STOCK

Bad News is Good News In AAPL?

AAPL Unusual Options Activity 090821

Morgan Stanley was busy defending AAPL this morning after we learned that supply chain issues are hurting production.

“We are buyers of any near-term AAPL share price weakness on iPhone supply chain disruption given AAPL is likely to receive more supply than competitors, demand isn’t perishable, and our FY22 estimates are unlikely to change materially even if revenue and EPS shift across quarters… Apple’s significant revenue outperformance - 7% upside vs. consensus forecasts YTD - is consistent with our supplier checks that Apple receives preferential treatment during periods of supply tightness. As a result, if Apple can’t meet near-term demand, the shortfall is likely to be even greater at competitors, creating an opportunity for share gains.”

Since it’s bad news, but worse for competitors, then it’s great for AAPL.

Got it.

I still think the stock looks weak.

What Does the AAPL Stock Chart Say?

AAPL Chart - Options Activity 101321

AAPL stock is firmly in this upward channel spanning a full year.

There are a several negatives I see...

First, the stock is under the 50dma, which is rolling over.

Second, there’s a MACD diversion over the last 3 months.

And third, I don’t like the lower highs in the last move down.

$135 is the bottom of the channel and meets the 200dma.

This level must hold or we could see a wave of selling.

The good news is that the stock is holding up well with this supply shortage news.

Options Activity in AAPL Stock

Unusual Options Activity Scanner AAPL 101321

Option flows are seeing 2 to 1 Calls vs Put options. A lot of the call activity is in the upside options, where it appears investors are paring down their purchases over the last month.

I also spotted sellers in these AAPL January 20th 2023 Call options activity that shows the long-term investors giving up some of their exposure.

Earnings results are due on October 28th .

That trade idea I passed along at $0.35 is up 57% since last week, now at $0.55.

Still worth a look.

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

Now go make some money!

Best,
Felix

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