Weed Stock Gets Buried By "Sell" Rating

Put volume is high on CRON today

Mar 27, 2019 at 3:21 PM
facebook twitter linkedin

The Dow is declining today as Wall Street continues to focus on falling Treasury yields. Three stocks making big moves are weed concern Cronos Group Inc (NASDAQ:CRON), homebuilder Lennar Corporation (NYSE:LEN), and retailer Shoe Carnival, Inc. (NASDAQ:SCVL). Below, we'll take a closer look at the shares of CRON, LEN, and SCVL.

Analyst Sinks CRON Stock with "Sell" Rating

A few different analysts have weighed in on CRON stock since yesterday's close, but the note grabbing the most headlines is a downgrade to "sell" at Canaccord Genuity. The brokerage firm pointed out that the company's earnings release yesterday disappointed despite it being the first full period with recreational sales in Canada. PI Financial also cut its rating on Cronos Group, to "neutral" from "buy," though Cormark upped its price target to $25 from $17.

The shares of the weed issue were last seen down 9.9% at $18.26, set for just their second close below the 50-day moving average this year. Coming into 2019, the equity was trading just above $10, and topped out at $25.10 back in early February. Meanwhile in the options pits, more than 49,000 puts have traded today, compared to a daily average of 17,000, and new positions are opening at July 18 put, the most popular contract today.

Earnings, Housing Outlook Lift LEN Shares

LEN stock is headlining strong price action from homebuilders today, last seen trading up 4.6% at $51.98. Wall Street is responding to the company's fourth-quarter results, and upbeat comments about the housing sector, with CEO Rick Beckwitt saying, "We are optimistic that the housing market has found firm ground and is ready to move forward." Today's rise has Lennar pacing for its first close atop the 320-day moving average since July, and brings the stock's year-to-date lead to 32%.

Options traders were extremely bullish ahead of the event, evidenced by the 10-day call/put volume ratio of 7.01 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Not only does this show that seven calls were bought to open for every put, but it ranks in the 95th annual percentile, meaning such levels of call buying are rare.

SCVL Shocks Shorts with Q4 Report

An impressive fourth-quarter earnings release has SCVL stock trading up 22.6% at $37.38. This extends a stretch of huge post-earnings moves from the shares, which over the past two years have averaged a 14.1% swing after earnings. At the same time, today's gains still leave in place a series of lower highs since Shoe Carnival's August high of $45.

Short sellers, meanwhile, are getting crushed, as these bears control an incredible 56% of the total float. Going by average daily trading volumes, it would take shorts more than three weeks to cover their positions.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners