Molson Coors Brewing Stock Looks Set to Slide

A round of bearish brokerage notes could create headwinds for TAP

Jul 3, 2018 at 8:35 AM
facebook twitter linkedin

Beer maker Molson Coors Brewing Co (NYSE:TAP) has had a tough time on the charts, with the shares down roughly 21% year-over-year. Plus, a recent rally off the stock's May 4 multi-year low was swiftly contained in the $68-$70 region -- home to its pre-bear gap levels from early May and its 100-day moving average. With technical resistance in place, it seems like a prime time to initiate a bearish options trade on TAP.

tap daily chart june 29

Short sellers have created a steady stream of selling pressure on the stock, with these bearish bets up almost 97% since the start of the year. However, short interest on TAP currently accounts for a low 2.9% of the equity's float, meaning there's plenty of room for more bears to climb on board.

A round of bearish brokerage notes could create headwinds for TAP, too. Despite the stock's long-term technical troubles, six of 11 analysts maintain a "strong buy" rating, with not one "sell" on the books.

TAP's options are attractively priced at the moment, as well. The equity's Schaeffer's Volatility Index (SVI) of 22% ranks in the 8th annual percentile, meaning short-term options are pricing in relatively low volatility expectations.

Subscribers to Schaeffer's Weekend Trader Series options recommendation service received this TAP commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners