The shares of Delta Air Lines, Inc. (NYSE:DAL) are down 4.7% to trade at $53.55, after the airliner issued a weaker-than-expected revenue outlook for 2019. At the company's investor day, Delta predicted a 4% to 6% rise in revenue -- weaker than analysts' expectations -- citing concerns about global economic growth. In response to the pullback today, options bears are coming out in droves. 

At last check, over 18,000 put options have changed hands so far today, three times what's typically seen at this point and nearly triple the average daily volume. The December 47 put is seeing notable attention, with bears likely buying to open the puts to bet on a steeper short-term slide for DAL. Meanwhile, roughly 31,000 calls have crossed the tape -- also three times the norm -- the majority of which is attributable to big blocks of more than 10,000 January 2019 57.50- and 60-strike calls exchanged, possibly as part of a spread.

On the charts, Delta stock nabbed a record high of $61.31 back on Nov. 30, but has pulled back since then, shedding 11.8% in December thus far. Today's drop takes DAL back below its year-to-date breakeven level of $56, and has the shares testing their 320-day moving average for the first time since late October.

Despite the uptick in puts today, calls have been the options of choice in recent days. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows 12,395 calls were bought to open in the last 10 days, compared to just 5,656 puts.

However, Delta stock's Schaeffer's put/call open interest ratio (SOIR) of 0.83 sits in the 80th percentile of its annual range. This indicates that while call open interest still outnumbers put open interest on an absolute basis, looking at options expiring in the next three months, short-term traders are more put-heavy than usual right now.

Elsewhere, analysts remain steadfast in their support for the airline name. All 13 of the brokerages covering DAL rate it a "buy" or better, and its average 12-month price target sits all the way up at $69.79, a 30% premium from its current perch.

U.S. stocks aren't making too big of a move in either direction today, with the Dow last seen slightly lower. As for individual stocks to watch, traders should check out the news around beer maker Boston Beer Company Inc (NYSE:SAM), supply chain solutions provider XPO Logistics Inc (NYSE:XPO), and pharma name Alkermes Plc (NASDAQ:ALKS). Continue reading for more insight on the shares of SAM, XPO, and ALKS.

UBS Says Sell SAM Stock

SAM shares are under pressure today, last seen off 3% at $265.75, after UBS began coverage with a "sell" rating and $228 price target. The stock has found familiar support at the $260 level, though, which is right near its 200-day moving average. Moreover, Boston Beer is up 39% in 2018.

Most other analysts share UBS' skeptical outlook, however, with six of seven handing out "hold" or worse recommendations. In a similar vein, the average one-year price target from this bunch offers little upside, coming in at $276.

Scathing Spruce Capital Note Sinks XPO Shares

XPO stock is collapsing today, sliding 25.8% to trade at $44.73, fresh off an annual low of $44.62. The sell-off is a continuation of yesterday's drop, sparked by the company's lowered full-year outlook.

On top of this, analysts have weighed in bearishly since yesterday's close. For instance, Spruce Capital initiated coverage with a "strong sell," saying XPO is "uninvestible and a potential zero" in a scathing note.

Elsewhere, Jefferies lowered its still-high price target to $120 from $145, adding that it believes macro issues have caused the company to underperform its peers. Credit Suisse also cut its price target down to $92, while SunTrust Robinson initiated coverage with a "buy" rating. Looking more broadly, 14 of 15 analysts already say to buy the equity, even though it's declined 60% in the past three months. 

ALKS Stock Downgraded on Pipeline Disappointment

ALKS is trading down 4.6% at $33.86, touching a two-year low of $32.37, after Credit Suisse downgraded the shares to "underperform" from "outperform" and dropped its price target to $30 from $47 -- a Street-low -- citing a "disappointing" drug pipeline. The stock has been grinding lower for months, and is sitting on a year-to-date deficit of 38.2%.

Amid the slide to new lows, Alkermes short sellers have been cashing out. Short interest declined by 14.5% in the past two reporting periods, though these bears still control six days' worth of buying power, based on the average daily trading volume.

Bank stocks have taken a bruising during the broader equities market's latest leg lower, with the Financial Select Sector SPDR Fund (XLF) down 11% since an early December rejection at the $27.50 level -- a familiar layer of resistance following the fund's mid-October bear gap, and home to its 80- and 120-day moving averages. In fact, the shares bottomed at a 15-month low of $24.30 on Dec. 10.

Today, XLF shares have erased an earlier lead to trade down 0.9% at $24.43, and put volume is accelerated. With less than an hour left in today's trading, around 144,000 puts have changed hands, compared to 73,000 calls. Trade-Alert highlights a potential risk-reversal, or synthetic long, strategy, using XLF's January 2019 22-strike puts and 25-strike calls, which would imply expected upside of more than 2% by the close on Friday, Jan. 18.

More broadly speaking, speculative players have been initiating long puts relative to calls at a faster-than-usual pace in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the fund's 10-day put/call volume ratio of 1.90 ranks in the 83rd annual percentile.

Whichever way speculators are playing XLF, short-term options are pricing in elevated volatility expectations ahead of next week's Fed meeting, where the central bank is expected to issue its fourth and final rate hike of 2018. The fund's 30-day at-the-money implied volatility was last seen at 23.9%, registering in the 93rd annual percentile.

 

Subscribers to our Weekend Trader Series service recently doubled their money with the Invesco Ltd. (NYSE:IVZ) January 2019 23-strike put. We'll take a closer look at why IVZ stock remained on our bearish radar, and how another winning options trade unfolded.

When we entered the position on Monday, Nov. 5, the investment management concern was having a 2018 to forget. The shares had shed 40% year-to-date, and recent rally attempts were stymied by their 40-day moving average -- admittedly off the radar of most traders, but a trendline that's been "money" as far as timing new put positions. So, when IVZ traded back to this moving average once again, our traders identified a low-risk, high-payoff trading opportunity in terms of betting on downside in the shares.   

Our conviction level was higher when eye-balling the short interest trend, as it was clearly evident that shorts were using bounces as opportunities to "press" their bets. Short interest had increased by 27% in the two most recent reporting periods, yet only 4% of the stock's total available float was dedicated to these bearish bets. This indicated there was ample room for more speculators to short the stock.

Surprisingly, analysts did not share the bearish sentiment, with 60% of the brokerages covering IVZ maintaining "strong buy" ratings. A round of downgrades would likely create headwinds for the stock.

Plus, while near-term implied volatility was relatively high -- likely due to a some company events that were scheduled in November -- volatility expectations were dramatically lower when extending out to a longer time frame. This indicated our recommended January puts were attractively priced on a relative basis.

After our put recommendation, Invesco stock continued to flounder under its 40-day trendline, due in part to pressure from shorts. Specifically, short interest peaked at 19.43 million shares in the Nov. 15 reporting period. While these bearish bets declined almost 26% in the most recent reporting period, the equity's inability to capitalize on this burst of buying power speaks to its underlying weakness.

Plus, these struggles were exacerbated by several overdue price-target cuts throughout November and December. IVZ hit an intraday low of $18.49 on Thursday, Dec. 6, allowing our subscribers to lock in a 100% profit in roughly a month.

 

Despite today's gains, the tech sector has been stumbling into the New Year, still reeling from October's sell-off. If history is any guide, there could be more trouble ahead for cloud concern Akamai Technologies, Inc. (NASDAQ:AKAM) and cybersecurity name Symantec Corporation (NASDAQ:SYMC), both flashing bearish signals heading into 2019.

AKAM Headed Toward Familiar Resistance

Akamai stock, at last check up 1.8% to trade at $68.76, is now within one standard deviation of its 80-day moving average. Over the past few years when encountering this trendline, AKAM went on to average a one-month loss of 8.9%, and was higher just 20% of the time, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

A move of similar proportions would put Akamai stock back near the $62.50 level, an area that has contained pullbacks all year. Three straight wins this week has helped put AKAM above its year-to-date breakeven level, although that 80-day trendline, which has served as resistance since mid-September, still looms overhead. Longer term, the equity hasn't had a monthly win since July. 

In the options pits, the security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.37, which ranks in the lower 6th annual percentile. In other words, options traders seem relatively upbeat, with data showing a higher-than-normal preference for near-term calls over puts.

SYMC Showing Signs of a Slowdown

Looking at Symantec, the stock is within one standard deviation of its 200-day moving average, after a lengthy stretch below this trendline. Over the past three years, there have been four similar run-ups to this moving average, after which SYMC went on to average a one-month loss of 7.19%, and was higher just 25% of the time, per data from White.

Symantec stock at last check was up 3.6% at $23.12, so a pullback of similar magnitude would bring it back near $21.50, a region that's been somewhat supportive recently. SYMC bounced nicely off its late October lows near $17.50, but has still shed nearly 18% in 2018. 

The sentiment in the analyst community is tremendously bearish. Of the 22 brokerages in coverage, 21 rate SYMC a "hold" or worse. What's more, the stock's average 12-month price target of $22.65 sits right at its current perch. This indicates that another pullback from the cybersecurity name won't catch analysts off guard and result in bear notes. 

The shares of Lululemon Athletica Inc. (NASDAQ:LULU) are up 5.1% to trade at $122.74, after Citigroup upgraded the athleisure retailer to "buy" from "neutral." The brokerage firm said LULU "is a brand to own in uncertain times," and that the stock's recent sell-off has created an attractive entry point. Options traders are piling on too, displaying a particularly bullish bias.

Over 9,800 call options have changed hands so far today, 1.5 times what's typically seen at this point. Leading the charge are the weekly 12/14 120- and 122-strike calls, where buy-to-open activity is suspected -- suggesting speculators expect LULU to extend today's rally through expiration at the close this Friday, Dec. 14.

On the charts, Lululemon stock nabbed a record high of $164.79 back on Oct. 1, but pulled back with the broader market. More specifically, LULU has shed 24.5% this quarter, although selling appears to be stalling out near the equity's 50-week moving average. Longer term, LULU boasts a 55.6% lead year-to-date, and has been a frequent target of bull notes in the past month.

The call buying trend seen today is nothing new, though. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows Lululemon stock with a 10-day call/put volume ratio of 1.52, ranking in the elevated 80th annual percentile. This indicates that over the past two weeks, calls have been purchased over puts at a faster-than-usual clip.

Echoing this the security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.89, which ranks in the 10th annual percentile. What this means is that short-term options traders are more call-skewed than usual.

Stocks are extending their impressive gains this afternoon on heightened hopes of a trade deal between the U.S. and China. Three individual names to watch are retailer Lowe's Companies, Inc. (NYSE:LOW), CBD drink specialist New Age Beverages Corp (NASDAQ:NBEV), and Chinese car sales concern Uxin Ltd (NASDAQ:UXIN). We'll dig into the news moving shares of LOW, NBEV, and UXIN below.

LOW Options Bears Run for the Exits During Stock Rally

After being halted for news pending earlier, shares of LOW are soaring thanks to the company's announcement it's buying back $10 billion in shares and confirming its full-year outlook. The stock was last seen trading up 4.1% at $93.11, but a much larger rally will need to come to fruition if it wants to revisit its late-September peak above $117. Still, today's gains put Lowe's a tick above its year-to-date breakeven point.

Puts had been popular in recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), according to the 10-day put/call volume ratio of 1.47, which ranks in the 91st annual percentile. In today's trading, puts are running at twice the average intraday clip. The most popular contract is the December 90 put, where it looks as though bears are closing out of their positions.

Farm Bill a Boon to New Age Beverages

NBEV stock is getting a boost today, after the U.S. Senate passed a new farm bill that legalizes industrial hemp. The bill is expected to hit the House of Representatives tomorrow, and could be signed by President Donald Trump as early as Friday. In response, the company released a statement saying it's prepared to nationally distribute its yet-to-be released CBD-infused beverages, the initial production runs of which are expected to be completed by Christmas.

All this has the shares set for a third straight win, last seen up 12.8% at $6.14. New Age Beverages' stock exploded back in September when it revealed its intention to sell cannabis products, and sports a year-to-date lead of around 180%.

All the excitement has resulted in an extreme bullish skew from speculators, based on the fact that roughly 23,400 calls were bought to open in the last two weeks at the ISE, CBOE, and PHLX, compared to just 3,244 puts. Options traders are targeting NBEV again today, with 31,000 contracts traded so far -- almost double the intraday average.

Uxin Stock Jumps on Taobao Update

UXIN shares are exploding today after the China-based company revealed impressive car sales thanks to its partnership with Alibaba's (BABA) Taobao. The stock is trading near the top of the Nasdaq, up 50.7% at $8.86, easily set for its best day ever after opening for public trading back in June, with an initial public offering price of $9. The stock earlier peaked just below that level, at $8.99.

This would mark a fifth straight win for the equity after it bottomed at $2.81 on Dec. 4. Analysts may begin moving in on the Wall Street newcomer, with only three firms in coverage as of now -- though their average 12-month price target stands up at $11.55.

Deutsche Bank AG (NYSE:DB) is near the top of the New York Stock Exchange (NYSE), after a Bloomberg report suggested the German government is actively pursuing a merger between the German lender and its rival Commerzbank. The article said efforts to marry Frankfurt's two biggest lenders include changing existing laws to make the strategic move more affordable, though it underscored that any talks are in an early stage.

At last check, DB stock is trading up 10% at $9.17, pacing toward its best day since April 2017. This upside is being contained by the equity's 10-day moving average, which has ushered Deutsche Bank lower since an unsuccessful test of its 120-day moving average in late September. And year-to-date, the security is down 52%, and hit a record low of $8.23 on Monday.

Today's gap has sparked a rare surge in DB call volume, with 56,000 contracts on the tape so far -- 12 times what's typically seen. The January 2020 30-strike call is most active, though it looks like one trader may be selling to close the position they originally initiated back on Jan. 4, when Deutsche Bank shares were trading near $19.77. Elsewhere, speculators may be buying to open December 9 calls, eyeing more upside for the bank stock through the close next Friday, Dec. 21.

 Widening the sentiment scope reveals options traders have been more bearish than usual toward DB. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 2.49 ranks in the 96th annual percentile.

Whichever position options traders are taking on Deutsche Bank stock, those purchasing short-term options are having to contend with rich premiums, historically speaking. DB's 30-day at-the-money implied volatility of 46.1% ranks in the 95th annual percentile, indicating near-term options are currently pricing in higher-than-usual volatility expectations.

 

The shares of Entera Bio Ltd. (NASDAQ:ENTX) are up 26.3% in electronic trading, after the biotech name announced a licensing deal with Amgen (AMGN) to collaborate on oral treatments for inflammatory diseases and other serious illnesses. Entera will receive up to $270 million in milestone payments, and will retain all property rights to its oral drug delivery technology.

Today's premarket upside has ENTX stock eyeing its best day ever, and trading near the top of the Nasdaq today. The shares are set to open at their highest point since mid-October, though the shares remain well below Entera Bio's late-June initial public offering (IPO) price of $8 per share.

Analysts have been relatively quiet on the Wall Street newcomer. Currently, only one brokerage firm is covering the stock, rating it a "buy" and maintaining a $12 price target, more than double Monday's closing price of $5.49.

Travelers Companies Inc (NYSE:TRV) is trading up 0.9% this morning at $124.18, trying to overcome a bear note out of RBC. The brokerage firm downgraded the insurance giant to "sector perform" from "outperform" and dropped its price target to $133 from $143. Citing the California wildfires and Hurricane Michael, RBC lowered its fourth-quarter earnings-per-share estimates for TRV, and is expecting weak pricing and a slowing economy to act as headwinds going forward.

All the same, RBC's price target is a premium to the equity's Monday close of $123, as the blue chip has continued to struggle on the charts. It touched an annual low of of $119.74 back in late October, and breakout attempts have been thwarted by the 200-day moving average since late August. In fact, TRV has essentially been in a series of lower highs since peaking near $150 back in February.

These technical struggles have prompted even more skeptics to take action. Most notably, there's been unusual put buying on Travelers during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), where the put/call volume ratio for that period stands at 6.20 -- high enough to rank in the 94th annual percentile. Said simply, many have been speculating on the stock moving lower.

Short interest has also been picking up. In the last reporting period, short interest on the security increased by 13.1%, though it still represents just 1.4% of the overall float. Considering this latter number, there's theoretically plenty of room for more short sellers to roll in, which would just add more pressure to TRV on the charts.

The shares of Galmed Pharmaceuticals Ltd (NASDAQ:GLMD) are trading up 17.7% at $9.32, after B. Riley initiated coverage on the drug stock with a "buy" rating and $28 price target -- a 253% premium to last night's close. The brokerage firm waxed optimistic on Aramchol, the drugmaker's Non-Alcoholic Steatohepatitis (NASH) treatment.

This upbeat outlook echoes the bullish bias already displayed by the brokerage bunch, with 100% of analysts in coverage maintaining a "buy" rating. Plus, the average 12-month price target sits all the way up at $33.38, well above GLMD's record high of $27.06 from June 12.

Short interest, meanwhile, is down 83% since its early August all-time peak of 640,000 shares. The 110,000 shares currently dedicated to these bearish bets account for just over 1% of GLMD stock's float, and would take roughly one session to cover, at the security's average pace of trading.

Looking at the charts, the drug stock has been in a downtrend since that mid-June bull gap. More recently, Galmed Pharmaceuticals shares have been churning beneath a trendline connecting lower highs since early October, and bottomed at a six-month low of $7.83 yesterday. Plus, today's upside is being contained by GLMD's 320-day moving average, which has been a ceiling since mid-November.

 

Defense stocks are higher today, bucking the broad-market sell-off, amid reports that President Donald Trump is performing an about-face on defense spending. The president in October said the defense budget for 2020 would be $700 billion, about a 5% cut, but rumor has it he told Defense Secretary Jim Mattis to submit a $750 billion budget. Against this backdrop, shares of Lockheed Martin Corporation (NYSE:LMT) and Raytheon Company (NYSE:RTN) are higher, and LMT and RTN options are more active than usual.

Lockheed Martin stock was last seen 3.3% higher to trade at $294.73, after last week touching an annual low of $277.22. The shares are still down more than 14% in the fourth quarter, but pullbacks have been contained in the $285 area. Meanwhile, the $290 level represents a 20% pullback -- and bear-market territory -- from LMT stock's February all-time high of $363. Prior to today, the security's 14-day Relative Strength Index (RSI) sat at 31 -- near oversold territory, suggesting a short-term bounce may have been in the cards.

In early afternoon action, Lockheed calls are trading at twice the average intraday pace, with roughly 2,800 contracts exchanged thus far. That's compared to fewer than 1,400 puts traded. The weekly 12/14 300-strike call is most active, though it appears some speculators are selling the options to open. If so, the traders expect the round-number $300 level to remain a short-term ceiling for LMT shares through the end of this week, when the options expire.

Bearish options betting has been ramping up on LMT in the past couple of weeks. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 0.91 stands in the 89th percentile of its annual range. This tells us that while long calls have outnumbered puts on an absolute basis, the pace of bearish betting has been faster than usual lately.

Raytheon shares were last seen 2.9% higher to trade at $169.95. As with LMT, RTN last week fell to its lowest point since mid-2017, dropping to $162.31 on Dec. 6. The equity is down about 18% so far in the fourth quarter, and roughly 26% since its April 24 record peak of $229.75. The stock's 14-day RSI stood at 32, as of Friday's close.

RTN has seen about 2,400 calls and a near-equal number of puts change hands today, compared to its average intraday volume of roughly 1,400 calls and 1,300 puts. As such, the equity's 30-day at-the-money implied volatility stands at 29.3%, in the 99th percentile of its annual range.

Garnering notable attention today have been the weekly 12/14 165-strike put and 177.50-strike call, where new positions are being opened. Buyers of the puts expect Raytheon stock to resume its slide and breach $165 by Friday's close, while the call buyers expect RTN to continue higher and top $177.50 by the weekend.

Even before today, short-term option traders were paying up to speculate on RTN. The stock's Schaeffer's Volatility Index (SVI) of 33% is in the 97th percentile of its annual range, indicating near-term options are pricing in relatively lofty volatility expectations for the defense stock.