History Says Bet on Campbell Soup Stock's Next Leg Lower

Options traders have been extremely bullish during the past two weeks

Managing Editor
Sep 25, 2018 at 1:14 PM
facebook X logo linkedin

Shares of Campbell Soup Company (NYSE:CPB) are moving lower in afternoon trading, last seen down 0.5% at $39.62. Below we will take a look at how CPB has been faring on the charts, and dive into why now looks to be an ideal time to bet on the stock's next leg lower, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

CPB has been in a downward spiral since its early December peak, notably suffering a huge bear gap in May. While the shares managed to recover those losses, the $42-$44 region has capped breakout attempts, alongside the 160-day moving average. Overall, Campbell Soup stock has shed 17% year-to-date.

Daily Chart of CPB with 160MA

Meanwhile, the shares are now within one standard deviation of their 160-day moving average, after a lengthy stretch below this trendline. There have been seven similar signals of this kind in the past three years, after which CPB went on to average a one-month loss of 3.15%, per White. Another dip of this magnitude would put the shares back near $38.38.

In the options pits, however, traders have been leaning bullish in recent weeks. This is per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which shows a 10-day call/put volume ratio of 3.22, ranking in the 80th annual percentile. This indicates that calls have been bought over puts at a faster-than-usual clip..

Echoing this is the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.26, which ranks in the bottom percentile of its annual range. This means short-term traders have rarely been more call-heavy on CPB in the past year.

Finally, short interest fell 12.5% during the past two reporting periods, but still represents nearly 19% of the stock's total available float. At the packaged food concern's average daily trading volume, it would take shorts over a week to buy back the rest of their bearish bets.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI