The shares of Abercrombie & Fitch Co. (NYSE:ANF) gapped dramatically higher on Nov. 29 in reaction to the retailer's blowout earnings report. The positive momentum quickly cooled as the stock ran into its 80-day moving average. ANF is trading near this trendline once again, suggesting the retail shares could be headed on their next leg lower.

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been three other times since 2015 that ANF has come within one standard deviation of its 80-day moving average after spending a significant stretch below it (defined as closing below the trendline 60% of the time in the past two months, and in eight of the last 10 trading days). The stock has gone on to average a one-month loss of 18.6%, with not one of those returns positive.

Another move of this magnitude would put Abercrombie & Fitch stock below $15 for the first time since November 2017, based on its current perch at $18.33 -- down 1.5% on the day. Longer term, the shares have surrendered 38% since their mid-August peak at $29.69, and gapped below their 80-day and 200-day trendlines during a late-August earnings-induced sell-off.

Against this backdrop, there's already an ample amount of skepticism priced into ANF stock. At 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 3.54 ranks in the 92nd annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip. Plus, 12 of 13 analysts maintain a "hold" or worse recommendation.

The stock is heavily shorted, too, with the 16.89 millions shares currently sold short representing one-quarter of ANF's available float. However, bears increased their positions modestly in the most recent reporting period, and continued accumulation could create bigger headwinds for the equity.

While most U.S. stocks are swimming in red ink today, shares of Pivotal Software Inc (NYSE:PVTL) are bucking the trend to trade higher. Bolstering the equity is an upgrade to "outperform" from "sector perform" at RBC, which waxed optimistic on Pivotal's software and services contract with the U.S. Air Force, calling it "a very nice win" for the company. The defense contract could generate up to $100 million over the next year for Pivotal.

PVTL stock was last seen 3.1% higher to trade at $15.95. However, the shares are still pacing for a weekly loss of more than 8.5% -- set for their worst week since September -- and yesterday closed at $15.47, their lowest since going public on April 20. The security is still north of $15, however, which was its initial public offering (IPO) price, and represents roughly half its all-time high, touched in mid-June. Prior to today, PVTL's 14-day Relative Strength Index (RSI) stood at 32 -- on the cusp of oversold territory, suggesting a short-term bounce may have been in the cards.

Despite the stock's slide in the second half of 2018, most analysts have remained bullish. In fact, half of the 10 brokerage firms following PVTL maintain "buy" or better endorsements, with not a "sell" in sight. Likewise, the average 12-month price target of $24.27 represents expected upside of more than 50% to the equity's current perch.

In addition, short sellers have been liquidating their positions. Short interest fell more than 14% in the past two reporting periods, yet Pivotal stock has failed to benefit. Still, 13.6% of the stock's total available float remains dedicated to these bearish bets.

While the market has undoubtedly seen heightened volatility in the weeks leading up to Christmas, next week -- typically a bullish week for stocks -- should be relatively quiet, at least as far as Wall Street's calendar is concerned. Stocks will have an abbreviated session on Monday, with a break in trading on Tuesday for Christmas. The week will be free of notable earnings, too.

Below is a brief list of some key market events scheduled for the upcoming week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates. 

U.S. markets will close early on Monday, Dec. 24, at 1 p.m. ET for Christmas Eve. During the abbreviated session, traders will look at the Chicago Fed National Activity Index. 

Markets will be closed on Tuesday, Dec. 25, for Christmas. 

Wednesday, Dec. 26, will feature the S&P Corelogic Case-Shiller home price index. 

Thursday, Dec. 27, marks the busiest day next week, with traders digesting the Fed's balance sheet, weekly jobless claims, new home sales, consumer confidence data, and the Energy Information Administration's (EIA) weekly crude inventories report.

The holiday week will end Friday, Dec. 28, with data on international trade, the Chicago purchasing managers manufacturing index (PMI), and the pending home sales index. 

Subscribers to Schaeffer's Weekly Options Trader service scored a 118% profit with the Carnival Corp (NYSE:CCL) weekly 12/14 62-strike put we recently recommended. We'll take a closer look at why CCL stock appeared on our bearish radar, and how the winning options trade unfolded.

When we entered the position on Friday, Nov. 30, the cruise line stock was getting rejected by its 200-day moving average, a trendline that roughly coincided with its post-earnings bear gap from September. With multiple layers of resistance looming, it seemed like CCL was poised to turn lower once more. 

Surprisingly, analysts were still entrenched in the bullish camp, with nine of the 14 brokerages covering CCL maintaining "strong buy" ratings, and not a single "sell" in sight. A round of downgrades could likely create headwinds for the stock.

In the options pits, there was a large amount of call open interest at the overhead 62.50 and 60 strikes. As long as CCL remained below these call-heavy strikes, this created the potential for selling into expiration as long as positions associated with these calls were unwound.

Plus, near-term implied volatility was relatively low for the weekly 12/14 puts, which expired before Carnival's Dec. 20 earnings date. This indicated our recommended puts were attractively priced.

After our put recommendation, Carnival stock continued to backpedal on the charts. We closed the first half of our position the morning of Monday, Dec. 10, when CCL was trading around $56.45. We closed the final half of the position on Friday, Dec. 14, when CCL fell to $56.33, allowing our subscribers to lock in a 118% profit in roughly two weeks.

Stocks are again falling to new lows today, as headlines point to a potential government shutdown. Looking at the Nasdaq in particular, three of the worst performers are ADMA Biologics Inc (NASDAQ:ADMA), Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), and DBV Technologies (NASDAQ:DBVT). We'll take a closer look at the shares of biotech stocks ADMA, SPPI, and DBVT below.

FDA News Sinks ADMA Stock

ADMA stock is collapsing today due to news that the Food and Drug Administration (FDA) did not approve the relaunch of Bivigam, the company's immune deficiency drug. ADMA shares have fallen 48.6% to trade at $2.17, earlier hitting a 52-week low of $2.13. The equity was trading right near the $7 mark at its September peak.

As such, Raymond James halved its price target on ADMA to $5 from $10. More bearish analyst notes could come through, too. All five brokerage firms in coverage have "buy" or "strong buy" ratings, and the average 12-month price target stands up at $11.50. This bullish tilt leaves the door wide open for downgrades and/or additional price-target reductions.

No Breakthrough Designation for SPPI's Poziotinib

SPPI is also sinking on FDA news, after the company's lung cancer treatment, poziotinib, didn't receive Breakthrough Therapy Designation. The stock was last seen down 35.4% at $6.75, tapping an annual low of $6.22 in the process, and has given back roughly 69% in the past three months.

While short sellers still control 8.5 days' worth of buying power, based on average daily trading volumes, short interest declined by 15.8% in the last two reporting periods -- so many bears missed today's sell-off. Of course, the equity is on the short-sale restricted list today.

DBVT Withdraws Peanut Allergy Treatment Application

DBV Technologies has withdrawn the marketing application for its Viaskin Peanut allergy treatment, after discussions with the FDA. A company statement said the application "lacks sufficient detail ... on manufacturing procedures and quality controls."

A number of bearish analyst notes have since come through, including downgrades to the equivalent of "hold" at Jefferies, Stifel, and Barclays, as well as a huge price-target cut to $8 from $37 at Jefferies. As such, the stock is trading down 70% at $7.71 -- the worst stock on the Nasdaq today -- hitting an all-time low of $3.60. Analysts were extremely bullish coming into today, with five of six handing out "strong buy" ratings.

Despite a recent pullback, shares of AES Corp (NYSE:AES) are still up 35.5% year-to-date, and has outperformed the S&P 500 Index (SPX) by more than 25 percentage points in the past three months. Plus, the utility stock just met up with its 80-day moving average -- a sign that, if history is any indicator, the stock could be due for a pop. 

The security has enjoyed a lengthy run above this moving average, with lows in recent months contained around the $14.40-$14.50 zone. However, broad-market headwinds of late have allowed this trendline to catch up with the equity's bull run, and AES has now pulled back to within one standard deviation of its 80-day moving average, trading today at $14.68. 

Over the past three years, there have been five similar tests of support at this trendline, after which AES stock was higher one month later 80% of the time, averaging a 4.53% return, per data from Schaeffer's Senior Quantitative Analyst Rocky White. From current levels, a similar move would put the energy concern back up near $15.35. 

AES could be due for some upgrades, which could help to fuel another bounce from this technical support. Two of the five analysts tracking AES have issued the security a "hold" rating, with one "sell" -- leaving plenty of room for possible bull notes to provide a boost.

What's more, the stock's 10-day put/call volume ratio of 1.13 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the high 92nd percentile of its annual range. This hints at a much healthier appetite for puts over calls as of late -- which could be a potential catalyst for additional tailwinds as bears begin to hit the exits. 

The financials, "fundamentals," and technicals for AT&T (NYSE:T) come down to -- Good: 6.6% dividend yield. Bad: Crushing $185 billion debt load, shares that peaked (without subsequently looking back) in 1999, and a business that has piled one costly acquisition on top of another and still cannot grow. Ugly: The accompanying chart (which may just be the ugliest we've ever encountered for a company with a market cap north of $200 billion... or $100 billion, for that matter).

And yet... Three analyst upgrades since October? And message board after message board packed with everyday investors so enamored of this "value" name that they buy every pullback? (The "message board topper"? In our view, the hopelessly smitten fellow who referred to T shares -- in 100% unironic fashion -- as "a monster"!)

Please check out the breadth and depth of the overhead price resistance as displayed on the accompanying chart (and labeled "BDR"). And just to ice the cake on the limited upside, we have what has been an impenetrable 200-day moving average atop those levels.

Our recommended put option is available on the cheap, despite the high level of overall market volatility. In fact, our targeted 100% profit over the recommended holding period could be achieved on a decline by T to just north of $27 -- at which point the shares will still be clinging to a $200 billion market valuation.

The shares of Tilray Inc (NASDAQ:TLRY) are up 7.4% to trade at $76.25, after the company announced a $100 million joint venture with Anheuser Busch Inbev NV (NYSE:BUD) to research THC- and cannabinoid-infused beverages in Canada. The country, which legalized recreational pot in October, is expected to approve weed-based drinks and edibles in October 2019. It's just the latest marijuana partnership for Tilray, which announced a medical marijuana deal with pharma name Novartis AG (NYSE:NVS) earlier this week.

TLRY stock skyrocketed to an all-time high of $300 in mid-September, as weed stocks rallied ahead of the aforementioned Oct. 17 legalization date in Canada. However, the momentum didn't last, with the shares ultimately backpedaling beneath support in the $95-$100 region -- also a 61.8% Fibonacci retracement of TLRY's opening-day close of $22.39 and Sept. 19 all-time closing high of $214.06.

Amid the stock's slide, it's no surprise to find that options buyers have preferred bearish bets lately. 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 1.23 indicates that traders have bought to open more Tilray puts than calls in the past two weeks.

The deep in-the-money January 2019 125-strike put saw the biggest increase in open interest, with nearly 2,400 contracts added during this time frame. Data suggests a healthy portion of the puts were, in fact, bought to open. By purchasing the puts, the traders expect TLRY to extend its recent retreat beneath the $125 level through the next several weeks.

Despite the huge declines in their share prices, many analysts have stuck behind FAANG stocks. Just this morning, Morgan Stanley named Facebook, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc (NASDAQ:GOOGL) its top picks from the internet space for 2019. The brokerage firm suggested that digital advertising won't be negatively effected by a slowdown in the broader U.S. economy, saying specifically, "Despite macro clouds, we remain confident in strong U.S. ad outlook."

For FB stock in particular, MS lifted its price target to $175 from $170. The shares struggled yesterday amid yet another round of bad news, but are marginally higher today -- up 0.9% to trade at $134.51. Even with the small increase, the security is dangerously close to its 52-week low of $126.85 from Nov. 20.

AMZN is managing to trade higher so far today, last seen up 0.6% at $1,503.33. The $1,500 region has been a short-term technical floor for the stock since late October, helping the equity maintain a roughly 28% lead in 2018. Still, some options traders earlier this week were betting on major losses for the e-commerce concern.

GOOGL so far is up 0.3% to trade at $1,038.50, still holding near the bottom of the $1,000-$1,120 area that it's chopped inside since late October. This puts the search giant on pace to close 2018 just below breakeven, with the 200-day moving average putting a firm lid on a breakout attempt earlier this month.

Shares of Walgreens Boots Alliance Inc (NASDAQ: WBA) are down 3.3% to trade at $70.60 this morning, despite reporting quarterly adjusted earnings that beat analysts' expectations. Traders are apparently reacting to a steeper-than-expected drop in same-store sales, and the pharmacy giant announced plans to cut more than $1 billion in costs over the next three years.

The month of December has been brutal for the blue chip, with WBA down 16.1% so far -- pacing for its worst month since June 2010. The equity is on pace for a sixth straight loss, and has dipped below its year-to-date breakeven of $72.62 today.  Now, the shares are testing their footing atop the 160-day moving average. 

Analysts have reservations about the pharmacy giant. Only four analysts give WBA a "buy" or better rating, while 12 slapped it with a tepid "hold." Goldman Sachs, meanwhile, recently downgraded the Dow stock to "sell." Meanwhile, the consensus 12-month price target of $78.57 represents just a 7.2% premium to current levels. 

Traders are jumping on the bearish bandwagon, too. Short interest is up 8.6% in the past two reporting periods, and WBA's Schaeffer's put/call open interest ratio (SOIR) of 1.12 sits in the 99th percentile of its annual range -- indicating that short term options players have rarely been more put-heavy in the past year. 

Despite today's gains, the healthcare sector has been under pressure lately amid the recent Obamacare court ruling. If history is any guide though, there could be clear skies ahead for blue chip Merck & Co., Inc. (NYSE:MRK) and cardiovascular disease specialist Amarin Corporation (NASDAQ:AMRN), both of which are flashing the same bullish signal.

MRK Could Test Multi-Year Highs to Start 2019

Merck stock, at last check, was trading up 0.6% at $74.81, and is now within one standard deviation of its 80-day moving average after a lengthy period above it. Over the past three years, there have been six similar encounters with this trendline, after which MRK went on to average a one-month gain of 5.34% and was higher 83% of the time, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

A move of similar proportions would put Merck stock back near $78.80, just a chip-shot from its 17-year high of $80.19 nabbed on Dec. 4. Overall, MRK boasts a 32% gain in 2018, carving out a channel of higher highs since an early April bottom near $53. During this stretch, and even as the broader stock market has swooned, the Dow name has rattled off nine straight monthly wins. 

In the options pits, the security's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.61, which ranks 1 percentage point from an annual high. In other words, options traders seem relatively pessimistic, with data showing a much higher-than-normal preference for near-term puts over calls. Should MRK once again bounce, an exodus of option bears could be beneficial.

AMRN Set to Snap Skid, Bounce Higher

Looking at Amarin, the stock is also within one standard deviation of its 80-day moving average. Over the past few years, there have been four similar dips to this moving average, after which AMRN went on to average a one-month gain of 11.93%, and was higher 75% of the time, per data from White.

Amarin stock, at last check, was up 3.5% at $15.41, on track to snap a four-day losing streak. A bounce of similar magnitude would have the drugmaker back above $17.20 to start 2019. AMRN has nearly tripled year-to-date, sparked by a late-September bull gap following upbeat data for its heart disease treatment.

What's more, traders looking to speculate on AMRN's near-term trajectory should consider options. The stock's Schaeffer's Volatility Index (SVI) of 92% is in just the 8th percentile of its annual range, suggesting short-term options are pricing in relatively low volatility expectations for the shares. In other words, Amarin near-term options are attractively priced at the moment.

It's been a volatile stretch for Nike Inc (NYSE:NKE) stock, per its 60-day historical volatility of 30.4% -- in the 100th annual percentile. The options market is expecting even more volatility for NKE shares after the athletic apparel retailer reports earnings after the market closes tomorrow, Dec. 20.

Specifically, Trade-Alert places the implied earnings deviation for Nike at 10.3% -- more than double the 4.5% next-day move the stock has averaged over the past two years. Those earnings reactions have been equally positive and negative in the last eight quarters, with just post-earnings performances (11% one-day gains in June 2017 and 2018) large enough to exceed the move the options market is pricing in this time around.

At least some options traders are betting on NKE's post-earnings price action to resolve to the upside. The December 70 call has seen the biggest increase in open interest over the last two weeks, and data suggests a number of these options were bought to open on Monday. If this is the case, the call buyers expect Nike stock to break out above $72.50 by expiration at the close this Friday, Dec. 21.

Meanwhile, short-term volatility expectations have ramped up ahead of earnings, as evidenced by the stock's 30-day at-the-money implied volatility (IV) of 38.9% -- in the 99th annual percentile. Plus, the 30-day IV skew of 16.5% registers in the 89th percentile of its 12-month range, indicating short-term call premiums have rarely been cheaper, relative to puts.

Outside of the options pits, short sellers have been increasing their exposure to Nike stock. Short interest jumped 14.7% in the most recent reporting period, but the 11.59 million shares currently sold short account for just 0.9% of the equity's available float.

Looking at the charts, Nike shares topped out at a record high of $86.04 on Sept. 21, before pulling back dramatically in October alongside the broader equities market. And while the Dow stock has recently found a foothold near the $70 mark -- a former layer of resistance that coincides with its +10% year-to-date return -- its 50-day and 200-day moving averages just formed a death cross for the first time since October 2017. Today, NKE stock is down 0.1% to trade at $71.05.