The shares of Tesla Inc (NASDAQ:TSLA) are down 2.6% in electronic trading today, after it was reported the company had cut the price of its Model 3 vehicle in China. This is the third time in the past two months Tesla has reduced the price of the vehicle. 

Tesla stock started December off strong in the wake of a big bull note. Last week, however, was the electric car name's worst weekly drop since Sept. 7. On the charts, TSLA is now set to open around $311, an area home to its pre-bear-gap levels from early October and the shares' year-to-date breakeven level. The stock is also pacing for a fall below the 200-day moving average.

Short sellers have been heading for the exits lately. Short interest fell 8.6% in the last two reporting periods to 27.36 million shares, the lowest amount since October 2017. However, this still represents a hefty 21.5% of TSLA's total available float. 

In the options pits puts have been popular lately. Looking at data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio sits at 1.12, showing a distinct preference for put buying over call buying during the past two weeks. What's more, this level of put buying relative to call buying is highly unusual, and in fact this reading ranks in the 94th annual percentile.

JD.com, Inc. (NASDAQ:JD) was last seen down 7.7% at $19.46, as traders react to news that the company's founder and CEO Richard Liu will not be charged after being accused of rape back in September. JD shares were trading above $30 before the news hit, and wound up hitting an all-time low of $19.21 a month ago.

Meanwhile, option traders' sentiment has shifted since we last looked at the e-commerce giant earlier this month. Specifically, JD's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) has moved up to 0.90. While this shows call buying has remained more popular on an absolute basis, the reading ranks in the 92nd annual percentile, revealing an unusual interest in long puts.

Pessimism has been building elsewhere, too. Short interest rose by 13.7% in the last two reporting periods, and now accounts for 6.9% of the total float. At the same time, it'd take these bears just 2.2 days to cover, based on average daily trading volumes. As for analysts, there are 13 in coverage, and just four recommend buying JD.com. The average 12-month price target sits up at $27.89, however.

The shares of Facebook, Inc. (NASDAQ:FB) are trading down 1.4% at $123.212 -- earlier hitting a nearly two-year low of $123.05, after Wedbush removed the FAANG stock from its "Best Ideas" list. However, the brokerage firm maintained its "outperform" rating and $220 price target, a 76% premium to Friday's close.

Today's negative price action is just more of the same for FB stock, which is pacing for a 24% fourth-quarter loss -- its worst quarterly performance since the third-quarter of 2012. What's more, Facebook is on track to close below its 50-month moving average for the first time since the trendline formed in June 2016.

Against this backdrop, skepticism has been ramping up both in and outside of the options pits. In addition to a handful of FB stock downgrades, put buying has accelerated at the major options exchanges in recent weeks.

Drilling down on specific options, the January 2019 140 and 150 strikes are home to peak put open interest, with more than 97,000 contracts currently outstanding. Data shows at least some buy-to-open activity at each strike, suggesting options traders are targeting more losses for Facebook at the start of 2019.

Last week was certainly a rough one for the broad-equity benchmarks, but it was particularly brutal for shipping giant FedEx (FDX). On Wednesday, the stock registered its biggest daily percentage drop in a decade after taking a hatchet to its fiscal 2019 profit forecast. The news caused a ripple effect across the transports sector, as CEO Alan Graf warned, "Global trade has slowed in recent months, and leading indicators point to ongoing deceleration."

With FDX as its top holding, the iShares Transportation Average ETF (IYT) felt the pain, too. By the end of the day on Wednesday, IYT was in "official" bear-market territory, down more than 20% from its mid-September closing high.

Plus, IYT wrapped up the week by closing two consecutive sessions beneath its 1,000-day moving average for the first time in over two years. This longer-term moving average is one of those "under-the-radar" technical levels we often like to track in our research, and the historical significance of the 1,000-day for IYT had been flagged by Schaeffer's Quantitative Analyst Chris Prybal just ahead of Thursday's closing break.

Looking back over the past eight years or so, there have been only a few previous examples of IYT diving below its 1,000-day moving average while simultaneously trading below both its 200-day and 320-day trendlines, as it is now. The prior occurrences in 2011 and 2016 coincided with extremely oversold readings from the exchange-traded fund's (ETF's) 14-day Relative Strength Index (RSI) -- and those breaks below the 1,000-day were relatively brief, lasting anywhere from just two days (around the time of the June 2016 Brexit vote) to just under two months (mid-August to early October 2011, and early January to mid-February 2016).

As of the end of last week, with its 1,000-day moving average now overhead, IYT was testing another possible layer of support at a rising trendline connecting a series of higher lows going back to its March 2009 bear-market bottom (represented by the red dashed line on the accompanying chart). However, support here is hardly foolproof; a successful test of this foothold on Thursday gave way to a break on Friday, and back in January 2016, selling pressure was heavy enough that the shares barely paused at this trendline before eventually bottoming around $115.

Late in the third quarter, we spoke about the "exhaustion" in the transports rally as a red flag for stocks. With that prospective "canary in the coal mine" scenario having since played out in about the grimmest possible fashion, we'd advise you in the weeks ahead to pay close attention to IYT's next moves around these longer-term trendlines (a technical trial that's largely escaping the notice of the financial media). A continued slice below these levels could foretell more pain and selling to come for stocks, while an oversold bounce back above -- and subsequent hold of -- these support layers would provide some cause to anticipate a period of short-term stabilization.

Subscribers to Bernie Schaeffer's Chart of the Week received this commentary on Sunday, December 23.

The shares of Etsy Inc (NASDAQ:ETSY) gapped nearly 24% higher the session after the e-tailer's blowout earnings report in early November, eventually topping out at a record high of $58.30 on Dec. 4. The security has since pulled back amid broad-market headwinds, but is now trading near a trendline with historically bullish implications -- suggesting the retail stock could bounce quickly in the new year.

Specifically, ETSY shares are trading within one standard deviation of their 160-day moving average. Previous pullbacks to this trendline after the stock has been trading above it for a lengthy stretch have resulted in a one-month average gain of 14.34%, according to data from Schaeffer's Senior Quantitative Analyst Rocky White, with all six of the individual returns positive.

There's plenty of skepticism to unwind on a stock that's doubled in value year-over-year. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ETSY's 10-day put/call volume ratio of 3.25 ranks in the 100th annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip.

And while short sellers have started throwing in the towel on their losing bets, there's still 9.35 million shares dedicated to these bearish bets. This accounts for a healthy 9.5% of Etsy stock's available float, and would take almost four days to cover, at the equity's average pace of trading.

 

Acorda Therapeutics (NASDAQ:ACOR) shares are up 5% at $13.59 today, lifted by Friday's late-breaking news that the Food and Drug Administration (FDA) approved its new Parkinson's drug. The inhalable treatment, INBRIJA, is expected out during the first quarter of 2019. Today's rally for ACOR is pulling it out of the gutter -- the stock ended last week at 12-year lows -- and could help the shares snap their four-day losing streak. 

That losing streak and multi-year lows capped off the serious pummeling ACOR has taken since an early September sell-off in which the security lost nearly a quarter of its value in a single day. The shares have since encountered resistance at the $20-21 area. Down 36.7% year-to-date, ACOR is headed for its second-worst year on record. 

Analysts are primarily cautious, with five of eight issuing ACOR a tepid "hold" rating. However, two still see it as a "strong buy," and only one slapped it with a "strong sell." What's more, the 12-month consensus price target of $21.89 still represents a 61% premium to the stock's current levels. 

ACOR's recent slump sparked some bearish speculation, with short interest up 13.3% in the past two reporting periods. That means today's rally could be the result of a short squeeze among some of the weaker bearish hands, as short interest now represents a whopping 20.7% of the stock's available float. Plus, at ACOR's average daily trading volume, it would take almost a month to repurchase all of these bearish bets -- a catalyst for additional tailwinds should pessimism begin to unwind. 

Crispr Therapeutics AG (NASDAQ:CRSP) is trading up 9.9% at $24.98 today, after it was revealed Friday evening that cystic fibrosis specialist Vertex Pharmaceuticals (VRTX) took a 10.1% stake in the gene editing company. On Friday, CRSP stock touched a nearly 52-week low of $22.22, as it's struggled mightily in the second half of the year.

To be more specific, the shares traded as high as $73.88 in late May, but since then have been stuck in a relentless downtrend. In just the past three months, Crispr Therapeutics has shed 45%, and not surprisingly ended up in oversold territory, like many stocks across the market, according to its 14-day Relative Strength Index (RSI) of 22. 

Still, analysts have mostly remained bullish. Of the 11 brokerage firms in coverage, seven say to buy CRSP. Even more notable, the average 12-month price target from the brokerage bunch stands all the way up at $66.17.

As for options traders, near-term open interest remains heavily call-skewed, according to the Schaeffer's put/call open interest ratio (SOIR) of 0.56, which ranks in the 9th annual percentile. On the other hand, put buying has picked up at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with the 10-day put/call volume ratio of 0.81 arriving in the 80th annual percentile. Said differently, there's been a greater-than-usual interest in put buying relative to call buying in recent weeks.

The shares of Guangzhou-based broadcasting name HUYA Inc (NYSE:HUYA) hit a record low of $14.44 on Dec. 7, after the arrest of a top Huawei exec sparked a sell-off in Chinese stocks. A short-lived bounce was quickly contained by the equity's descending 40-day moving average, and previous such signals have marked good selling opportunities on the stock.

Per data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been two other times HUYA stock has come within one standard deviation of its 40-day trendline after trading below it for 60% of the time in the past two months, and closing below it in eight of the last 10 sessions. These previous signals have resulted in a negative one-month return of 24.33%.

Looking closer at the charts, HUYA stock began trading on the New York Stock Exchange (NYSE) on May 11 at $15.50. The shares climbed as high as $50.82 on June 15, but have trended steadily lower since tagging that notable milestone, and are currently pacing for a fourth-quarter loss of 35.5%. Today, Huya shares are down 2.8% at $15.14.

Options traders have been bracing for more losses, per the stock's top-heavy 10-day put/call volume ratio of 1.16 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The weekly 12/28 16.50-strike put has seen one of the biggest increases in open interest over this two-week time frame, and data points to buy-to-open activity here.

 

The shares of Altria Group Inc (NYSE:MO) are down 3.1% in early trading at $48.89, after Citigroup downgraded the stock to "sell" from "neutral," while trimming its price target $45 from $47. In addition, Independent Research downgraded MO to "sell" from "hold" and slashed its price target to $47 from $59, and Stifel chimed in with a price target hike of its own, to $59 from $70. Stifel said that Altria will "struggle to earn a sufficient return" on its investment in JUUL, citing what it saw as a "rich" evaluation.

As such, MO stock is trading at fresh three-year lows for a second straight day, and is on track for its third straight weekly loss. During this time frame, the shares have faced pressure from their descending 20-day moving average. Overall, MO has shed 19% in the past three months.

Despite the recent flurry of bear notes, analyst sentiment remains bullish. Of the 15 brokerages covering MO, 11 rate it a "buy" or "strong buy," with four "sells" on the books. Further, the security's consensus 12-month price target of $62.55 is a 24% premium to yesterday's closing perch of $50.44, suggesting today's onslaught of bear notes could be far from the last. 

In addition, short sellers have been skeptical to jump aboard. Shorts in fact have been hitting the exits, with short interest down 15% in the last two reporting periods. However, the 21.28 million shares sold short is the lowest amount since mid-July 2018, and represents a meager 1.1% of MO's total available float.  

The shares of CarMax, Inc (NYSE:KMX) were lower in premarket action, after the used car retailer said unit sales slumped 1.2% on a comparable store sales basis in the third quarter. However, the company also said total unit sales rose 2.3% over the three-month period, and reported a third-quarter earnings beat of $1.09 per share on in-line revenue of $4.3 billion. As such, KMX stock was last seen up 2.8% at $58.28.

It's been a tough stretch for KMX stock, which has shed around 30% since its mid-September highs north of $80. More recently, the security breached long-term support near $67 in early November -- a region that has since emerged as resistance -- and tapped a 19-month low of $55.24 yesterday.

Options traders have been bracing for more losses from the retail stock. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), KMX's 10-day put/call volume ratio of 6.72 ranks in the 99th annual percentile, meaning puts have been bought to open over calls at a much quicker-than-usual clip.

Drilling down, the weekly 12/28 57.50-strike put has seen the biggest increase in open interest over the past 10 days, with more than 7,800 contracts added. Trade-Alert highlights a block of 7,800 that was likely bought to open on Tuesday for $1.30 apiece. If this is the case, breakeven for the put buyer at the close next Friday, Dec. 28, is $56.20 (strike less premium paid).

In the latest Facebook, Inc. (NASDAQ:FB) news cycle, the company, along with rival Twitter (TWTR), said it's removing fake news sites in Bangladesh ahead of elections there. Bloomberg has also reported that the tech giant is working on a cryptocurrency to be used in its WhatsApp application. Meanwhile, back on Wall Street, FB stock was just hit with a downgrade to "sell" from "hold" at DZ Bank, which runs counter to the analyst attention the security received yesterday.

Pessimism has also been building in the options pits, not surprising given the equity's rapid decline on the charts and increasingly negative news reports. Looking at data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the 10-day put/call volume ratio has risen to 0.98, showing a near-even split between put buying and call buying during the past two weeks. However, this level of put buying relative to call buying is highly unusual, and in fact this reading ranks in the 100th annual percentile.

Some may be surprised to see that short interest on the struggling social media name still sits at just 1.3% of the total float, though the number of shorted shares has steadily been increasing in recent months, including a 7.8% rise in the last two reporting periods. Looking at this another way, the 30.6 million shares held by short sellers is quickly nearing the peak levels from April earlier this year. So far today, Facebook shares are down 1.5% at $131.43.

Shares of Nike Inc (NYSE:NKE) are up nearly 9% at $73.48 in early trading, after the company announced its fiscal second-quarter earnings results last night. The Dow component reported strong online sales in North America, as well as quarterly revenue and profit that beat analyst expectations. J.P. Morgan Securities and Pivotal Research have already raised their ratings on the footwear giant, too -- with the former lifting NKE to "overweight" from "neutral," and the latter raising its rating to "buy" from "hold."

NKE shares have pulled back recently, moving in step with the broader market sell-off. The shoe stock is down about 17% from its September all-time high of $86.00, but sports a year-to-date gain of 17.5% -- comfortably surpassing the roughly 6% losses racked up by the Dow and S&P 500 Index (SPX) for 2018 to date. In fact, with just over a week to go until the year is over, NKE stands out as the No. 4 top-performing Dow component of 2018.

In accordance with this standout price action, J.P. Morgan and Pivotal aren't the only analysts taking a bullish stance on NKE. Of the 23 brokerage firms following the stock, 14 give it a "buy" or better rating. What's more, the 12-month consensus price target of $86.79 implies expected upside of 18.1% to current levels. 

Short interest on NKE rose 14.7% in the most recent reporting period, suggesting some bears think the stock has reached a top. However, it was the equity's now near-the-money December 75 call that saw the biggest open interest increase in the 10 trading days leading up to earnings, per Trade-Alert, with 2,629 contracts added at this just-overhead strike since Dec. 10.