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.

 

J.P. Morgan Securities analyst Stephen Tusa upgraded General Electric Company (NYSE:GE) to "neutral" from "underweight," marking the first time since May 2016 he's adjusted his rating on the former Dow stock. Tusa also removed GE from his Analyst Focus List as a short idea, even though he maintained his Street-low $6 price target, but noted the brokerage firm is "increasingly assuming a material equity raise could be necessary."

Additionally, General Electric said it's digital unit will sell its majority stake of cloud-based software name ServiceMax. Against this backdrop -- and despite a price-target cut to $12 from $11 at UBS -- GE stock is up 10.1% to trade at $7.39. More broadly, the former Dow stock has made a well-documented path lower, down nearly 80% from its July 2016 post-recession peak at $33, and hit its March 5, 2009, closing bottom of $6.66 in intraday trading on Monday.

Options traders have been growing increasingly bearish toward GE in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 0.64 ranks in the 81st annual percentile. While this shows calls have outpaced puts on an absolute basis, the rate of put buying has been quicker than usual.

Today, GE options volume is hot out of the gate, with roughly 99,000 puts and 63,000 calls on the tape in the first 20 minutes of trading -- about five times what's typically seen at this point. The January 2019 5-strike put is most active, where it looks like speculators may be buying to open new positions for a volume-weighted average price of $0.06. If this is the case, breakeven for the put buyers at January options expiration is $4.93 (strike less premium paid), territory not seen since late 1990.

The shares of Lowe's Companies, Inc. (NYSE:LOW) rallied nearly 3% yesterday -- and today, are up 0.4% at $92.46 -- after the company unveiled a new share buyback program at its annual analyst day. The brokerage bunch was quick to chime in, too. RBC and Stifel raised their respective price targets to $105 and $96, while Loop Capital reiterated its "buy" rating, saying the "shares of Lowe's are attractively priced." SunTrust Robinson, however, slashed its target price to a still lofty $128 from $138.

Analysts are generally optimistic about the home improvement retailer, with a majority 20 of 24 analysts calling LOW a "buy" or better, and not one "sell" rating on the books. Plus, the average 12-month price target of $111.54 is a 20.8% premium to current trading levels.

This week's upside has LOW within striking distance of its year-to-date breakeven mark of $92.94. However, the shares are still well off their all-time high of $117.70 from Sept. 28. Since this peak, the stock has shed 21% under pressure from its 30-day moving average, with a recent rally halted by its 200-day moving average. 

Traders have been growing increasingly skeptical in recent months. The equity sports a 50-day put/call volume ratio of 1.11 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 96th percentile of its annual range. This indicates that in the past two weeks, traders have bought to open puts over calls at a quicker-than-usual clip.

 

 

The shares of apparel retailers Tailored Brands Inc (NYSE:TLRD) and Oxford Industries Inc (NYSE:OXM) are set for major losses today after the companies' quarterly reports. TLRD stock, for example, is on pace to sink a stunning 25.3% at the open, which would put it at a fresh 52-week low. The price weakness is a result of the Men's Wearhouse parent's disappointing third-quarter revenue and lowered full-year outlook.

Brokerage firm Jefferies responded to the results with a price-target cut to $31 from $40. The analyst in coverage suggested the stock could continue to struggle until Men's Wearhouse shows improvement. The firm is just one of two that are in coverage on TLRD. 

Looking elsewhere, it's possible Tailored Brands short sellers were seeking insurance in the form of call options ahead of the quarterly event. For starters, these bears control more than 23% of the float, equating to almost two weeks' worth of buying power, based on average daily trading volumes. Combining this data with TLRD's elevated 10-day call/put volume ratio of 6.47 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) would lead one to believe shorts were buying calls to hedge against an upside move.

The equity closed Wednesday at $20.14, slightly lower on a year-to-date basis, after recently moving below the support of the 320-day moving average. Looking back, the shares hit an annual high of $35.94 on May 14.

Moving on to OXM stock, its pre-market activity has it set for a 14.4% decline at the open, which would also have it at an annual low. The owner of Lilly Pulitzer came up short of analysts' expectations with both earnings and revenue for the third quarter. This technical weakness would be just more of the same from a security that hasn't traded above its 20-day moving average since Nov. 19, settling at $74.81 yesterday.

Analysts at D.A. Davidson and Telsey Advisory have already reacted, with the first firm downgrading Oxford Industries to "neutral" from "buy," while the latter cut its price target to $76 from $93. There's potential for more bear notes to come through and weigh on OXM shares going forward, since 80% of the analysts in coverage have "strong buy" recommendations.

As for options traders, there was an intense put-skew ahead of the event among those targeting contracts expiring within three months. This is according to the equity's Schaeffer's put/call open interest ratio (SOIR) of 5.57, ranking in the 100th percentile of its annual range.

The shares of Procter & Gamble Co (NYSE:PG) are up 0.9% in electronic trading, set to open near a new record high after BofA-Merrill Lynch upgraded the Dow component to "buy" from "neutral." The brokerage firm also lifted its PG price target to $108 from $95 -- a 14% premium to last night's close at $94.03 -- with the analyst in coverage waxing optimistically over the company's consistent sales strength, and believes the momentum will continue in early 2019. 

The Dow stock has been on a tear since its May 2 bottom near $70, adding 33% and nabbing a Dec. 4 record high of $94.86. While the stock has lost some steam since then, its short-lived pullback was contained by its 30-day moving average, a trendline that helped usher the shares higher in the third quarter.

Despite the stock's technical tenacity, analysts remain hesitant to jump aboard the bullish bandwagon. Of the 17 brokerages covering PG, 11 rate it a "hold" or "strong sell." What's more, the stock's consensus 12-month price target of $90.13 sits below yesterday's current levels, indicating the equity is ripe for more bull notes in the future. 

Traders looking to speculate on PG should consider short-term options. The equity's Schaeffer's Volatility Scorecard (SVS) stands at a lofty 90 out of 100, indicating the shares have handily exceeded options traders' volatility expectations in the past year -- a boon to premium buyers.

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.