Snap Stock Heads Toward Worst Losing Streak Since July

Tesla shares are bouncing after an update on Model 3 production

Apr 3, 2018 at 3:26 PM
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It's a broad-based rebound on Wall Street today, with the major U.S. benchmarks pacing for a positive session. Among individual stocks making notable moves are Model 3 maker Tesla Inc (NASDAQ:TSLA), Snapchat parent Snap Inc (NYSE:SNAP), and drugmaker Celgene Corporation (NASDAQ:CELG). Here's a closer look at what's moving shares of TSLA, SNAP, and CELG.

Tesla Stock Bounces as Cash Concerns Ease

It's been a rough few weeks for Tesla stock, which fell almost 30% from its March 12 intraday high north of $347 to yesterday's session low at $244.59, testing a key technical level. Today, though, the shares are up 5.5% at $266.38, after the automaker said Model 3 production topped 2,000 units last week -- and projected increasing output over the next three months. More significantly, the company said it doesn't need to raise any additional capital -- following a downgrade to its credit rating last week.

And amid JPMorgan's calls to buy put options on TSLA stock -- saying it "may be unable to escape a continued sell-off" -- more than 123,000 puts have traded so far today, almost two times what's typically seen at this point. Traders may be buying to open the weekly 4/6 250-strike puts for a volume-weighted average price (VWAP) of $2.10. If this is the case, they're hoping for a move below breakeven at $247.90 (strike less VWAP) by Friday's close.

Snap Shares Have Erased Their February Earnings Gains

Snap stock is down 3.2% to trade at $14.00 -- on pace for a seventh straight loss, its longest losing streak since last July. What's more, the shares have now erased all of their early February earnings-induced gains, and are on track for a second straight close below their recently formed 200-day trendline. Earlier, the social media firm said it's looking into potentially opening an office in Saudi Arabia, and unveiled a new group video feature on Snapchat.

It looks like options traders expect Snap's sell-off to continue over the next several weeks. Of the more than 48,000 puts that have changed hands today, the April 13.50 strike has seen notable activity, and it looks like new positions are being purchased for a VWAP of $0.40. This makes breakeven for options bears $13.10.

Celgene Stock Slides as COO Resigns

Celgene stock has dropped 0.8% to trade at $86.33 -- earlier hitting a three-year low of $84.25 -- on news the biotech's chief operating officer suddenly resigned. CEO Mark Alles will take over the responsibilities. Today's downside just extends the stock's longer-term technical troubles, with CELG shares off 42% from their early October record high at $147.17.

Nevertheless, 15 of 28 analysts maintain a "strong buy" rating, with not one "sell" recommendation on the books. Plus, the average 12-month price target of $116.89 stands at a 37% premium to CELG stock's current price. This puts the underperforming shares at risk of bearish brokerage notes, which could create even bigger headwinds.

 

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