Cannabis Stock Soars After Farm Bill Clears Senate

Shares of UNIX are trading near the top of the Nasdaq

by Josh Selway

Published on Dec 12, 2018 at 2:45 PM

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.


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