Bears fumbled again
Notable Flow 11/19
Howdy frens, quite the run-up today innit? Let’s jump right into it!
Notable Flow:
JNPR 0.00%↑ 36C 12/20 Exp
DDOG 0.00%↑ 140C 02/21/2025 Exp
EL 0.00%↑ Bullish Risk Reversal: 55P STO & 75C BTO 06/20/2025 Exp
X 0.00%↑ 49C 12/27 Exp
JNPR 0.00%↑ 36C 12/20 Exp
Vol: 17,105 OI: 19 Avg: $1.50 Prem: $2,566,480
The stock has been volatile lately, with a 5% drop on Friday after the DOJ is expected to decide its $14 billion sale to Hewlett Packard Enterprise HPE 0.00%↑. This Floor Trader speculates that the stock will get good news and bought over 14k contracts of these calls, paying over $2 million. This big spike in calls caused the call net premium to reach its highest levels in the past 30 days.
Essentially a lotto (with insane size…) on the DOJ decision. Not much else to say here other than good luck Mr. Whale!
DDOG 0.00%↑ 140C 02/21/2025 Exp
Vol: 4,583 OI: 66 Avg: $5.43 Prem: $2,491,080
These calls hit the tape right at open. The chain had no previous OI last week and only 66 contracts today before the bell. With over 4.7k in volume and 2.7k Ask side, this floor trader paid $2.2 million for the trade; the rest of the volume will be confirmed tomorrow when the OI sticks, but it should be somewhere between 2.5k - 3k contracts (maybe more). The stock had its highest call buying in the past 30 days.
All year long I have been tracking DataDog. All year long, it has been relatively in the same spot. All year long, I have waited for a breakout. This could be it. Testing the top of the yearly range today at 134 - it appears that it is ready to do so. There was a multitude of other strikes and expirations hit today some further than this one in particular but it seems as though there is a general consensus of a near breakout.
Having broken out of the recent flag off of the support zone highlighted in purple and white, DDOG backtested this flag and has rallied over 6% during today’s session providing investors and traders alike more confidence going forward. What has been a year long laggard in many regards, is due. The asset has mounted all relative moving averages and is poised for a breakout over this 134 spot with little resistance above to 140. You could either jump right on in, I hear the water is warm, OR you could wait for any sort of pullback into the 10D and start your position there. An open above 134 would bring fomo and breakout buyers into the trade driving price further as others look for dated leaps.
EL 0.00%↑ Bullish Risk Reversal: 55P STO & 75C BTO 06/20/2025 Exp
This Floor Trader uses a multi-leg bullish strategy, selling 2.5k contracts of the 55P on credit and using that credit to buy 2.5k contracts of the 75C, paying $300k for the trade. The trader's PnL will be positive if the stock trades above $75, negative if it trades below $55, and break even if it trades between $55 and $75 by the expiration.
Bottom fishing! I have pulled the monthly chart here strictly for the purpose of displaying the lucrative upside and multi-year losses the asset has faced as it is trading at levels not seen since 2014-15…
In regards to shorter term outlook, EL did reclaim the 10DMA after getting smoked off of an earnings beat October 31st. The daily also displays a ‘makeshift’ pennant which could trigger some upside with a break above. It was recently reported that there was an insider purchase of $10 Million worth of stock which bodes well for long term investors as it displays confidence from inside of the organization. Never a bad look to have guys have faith in themselves! Plenty of time behind this trade so no need to rush for entry but rather take a scale in / scale out approach.
X 0.00%↑ 49C 12/27 Exp
Vol: 21,529 OI: 6 Avg: $1.45 Prem: $3,114,458
A chain with no volume or OI last week and only 6 contracts traded this week hit the tape today, caused by a big spike in calls. The first trade had 16k in volume, with 15k contracts traded at the Ask and a premium of $2.2 million. The next trade had 4.9k in volume, all at the Ask, with a total daily premium of $3.1 million. Today, the stock had its highest call buying in the past 30 days.
In regards to the news behind this trade, there has been a good bit of pushback on the US Steel takeover deal with Nippon seeking employee support bypassing the Union Leadership.
Looking at the chart specifically now, we notice a falling wedge on the daily pushing into the 10, 20, & 200DMA’s with support from below by way of the 50DMA. The breakout of the falling wedge seemingly began today after pushing into it yesterday at close. A reclaim of these moving average’s previously mentioned is imperative for continued upside, momentum, and building out supportive moves going forward.
Support can be found at the backtest of the wedge break (essentially the 50D), and furthermore the 35-36 handle shown below. Resistance is obviously these overhead moving averages until reclaimed and then we look towards the 43 handle which correlates to local highs on the daily chart - a level that was lost in mid March of this year and yet to be reclaimed.
Thanks for joining us, hope you all enjoyed the read! Onto Wednesday!
Cheers,
Kian, Jersace, & Jon