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Monday’s Vital Data: Amazon, Cronos Group and Exxon Mobil

Options activity provides a look at expectations on XOM, AMZN and CRON

By Tyler Craig, Tales of a Technician

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U.S. stock futures are circling unchanged this morning as the earnings beat rolls on. The next tech titan to step up to the plate is Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), which reports tonight after the bell.

Monday's Vital Data: Amazon (AMZN), Cronos Group (CRON) and Exxon Mobil (XOM)Heading into the open, futures on the Dow Jones Industrial Average are down 0.05% and S&P 500 futures are lower by 0.06%. Nasdaq-100 futures have lost 0.1%.

In the options pits, call volume won the day, if only slightly. Overall volume levels remained near average levels. Specifically, about 19.2 million calls and 17.6 million puts changed hands on the session.

Moving to the CBOE, the single-session equity put/call volume ratio popped to 0.6. Meanwhile, the 10-day moving average ticked higher to 0.63.

Here were three stocks landing atop the most-actives list. Amazon (NASDAQ:AMZN) saw renewed options interest after getting hit on weak forward earnings guidance. Cronos Group (NASDAQ:CRON) shares were flying high following upbeat comments during the earnings conference call of its largest shareholder, Altria (NYSE:MO). Finally, Exxon Mobil (NYSE:XOM) jumped on a better-than-expected earnings report of its own.

Let’s take a closer look:

Amazon (AMZN)

After Thursday’s closing bell, Amazon delivered earnings per share of $6.04 on a record $72.4 billion in revenue for the fourth quarter. While both measures bested the Street’s estimates, forward guidance left much to be desired. Traders anchored on the second piece of news and sent AMZN shares down 5.38% by day’s end.

With the slide, Amazon stock has returned to no-man’s land. It remains sandwiched between a sideways moving 200-day and 50-day moving average. One silver lining to the stalemate is it’s providing clear levels to trade off of. Watch for a break of either $1,600 or $1,730 to signal the direction of its next move.

On the options trading front, calls outpaced puts by a modest margin despite the day’s drubbing. Total activity ramped to 239% of the average daily volume with 431,513 contracts traded. Calls contributed 55% to the total.

Heading into the number, option premiums were pricing in a 5% move. So that makes the 5.38% drop right on target. Implied volatility sank on the day to 31%, placing it at the 41st percentile of its one-year range. Premiums are now baking in daily moves of $32.17 or 2%.

Cronos Group (CRON)

Marijuana stocks continue to pepper the most-actives list, with traders taking to the derivatives market for limited-risk bets. Cronos Group and Canopy Growth Corp (NYSE:CGC) are taking turns with their appearances. The entire industry has been on fire this year with rampant upside speculation.

CRON stock continued its rocket ship rise on Friday, jumping to a new record high of $21.79 amid its highest single-session volume of the year. The gains came on the heels of the earnings conference call for Altria. During the call, the tobacco giant cited several reasons for their buying a 45% stake in Cronos Group.

On the options trading front, puts ruled the roost by the slimmest of margins. Activity swelled to 421% of the average daily volume, with 175,548 total contracts traded. Puts accounted for 51% of the day’s take.

The increased demand drove implied volatility higher on the day to 117%, placing it in the center of its one-year range.

Exxon Mobil (XOM)

The budding recovery in energy stocks received a boost on Friday after the king of the industry reported expectation-beating earnings. Exxon Mobil reported fourth-quarter earnings of $1.41 per share on revenue of $71.90 billion.

XOM stock rallied 3.6% on heavy volume. The jump carried Exxon back above its 50-day moving average and horizontal resistance at $73.50 to officially end the downtrend that commenced last October.

On the options trading front, traders came after calls with a vengeance. Activity ballooned to 359% of the average daily volume, with 114,763 total contracts traded. Calls added 73% to the day’s tally.

Friday’s 3.6% rally exceeded market expectations. Option premiums were anticipating a relatively quiet move of 2.3%. With the post-earnings volatility crush, implied volatility has descended to a lowly 19%, placing it at the 17th percentile of its one-year range. Traders are now pricing in 93-cent daily moves, or 1.2%.

As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.


Article printed from InvestorPlace Media, https://investorplace.com/2019/02/mondays-vital-data-amazon-cronos-group-and-exxon-mobil/.

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