Kroger Stock Pivots Lower After Amazon Grocery Report

ImmunoGen is near the bottom of the Nasdaq today

by Patrick Martin

Published on Mar 1, 2019 at 2:25 PM

The Dow is enjoying solid gains today, while the Nasdaq eyes yet another weekly win. But it's not all sunshine and rainbows, as grocery stock Kroger Co (NYSE:KR), biotech ImmunoGen, Inc. (NASDAQ:IMGN), and electric car concern Tesla Inc (NASDAQ:TSLA) are all sharply lower. Here's a quick look at what's got the shares of KR, IMGN, and TSLA struggling today.

Options Traders Target Sinking KR

KR was doing fine today, trading at $29.90 at its session highs, until the Wall Street Journal reported Amazon.com (AMZN) was planning on opening dozens of grocery stores. Kroger stock is now down 4.2% to trade at $28.10 at last check, after falling as low as $27.46 earlier. Despite the sudden pivot, KR shares appear to have found a floor at their 320-day moving average, a trendline that contained a drop in late December.

In response, KR options volume has exploded today, with 12,000 puts on the tape so far, four times what's typically seen at this point and triple the amount of calls traded. The May 24 put is most active, but there's also new positions being opened at the weekly 3/1 28-strike put, which expires later today.

IMGN Finds New Bottom After Failed Cancer Drug Study

Near the bottom of the Nasdaq sits ImmunoGen stock, down 45.9% at $2.16, after the company's ovarian cancer drug failed a late-stage study. Jefferies promptly downgraded the biotech to "hold" from "buy," while slashing its price target to $2.50 from $14. Canaccord Genuity joined in with a bear note, too, trimming its target to $12 from $20. IMGN earlier skidded to a two-year low of $2.27, and is heading toward its worst day since June 2002. There could be more bear notes to come. Of the eight brokerages covering IMGN, five rate it a "strong buy," and its consensus 12-month price target of $13.63 is now a 434% premium to its current perch. 

Tesla Sinks After Musk Announcement

Tesla stock is down 8.1% at $293.87, after CEO Elon Musk announced an expected loss the first quarter, as well as a cheaper version of its Model 3 sedan, and a shift to online-only sales.  Anticipation surrounding the big announcement Musk teased earlier this week on Twitter sent the shares higher, but resistance emerged at TSLA's 100-day moving average, a trendline that kept a lid on a rally last month. 

Options traders are blitzing the stock, too, with more than 485,000 options on the tape -- triple the average intraday amount and volume pacing in the 99th percentile of its annual range. Day traders are active, with the weekly 3/1 series accounting for nine of TSLA's 10 most active options. The weekly 3/1 300-strike call has seen the heaviest attention, and new positions are being initiated here.
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