Tesla Stock Options Traders Target Key Level Ahead of Expiration – Schaeffers Research

It’s another breakout session for stocks today, with the Dow up around 290 points at last check, and fresh of a new record high. Among individual equities moving higher with the broad market are electric car concern Tesla Inc (NASDAQ:TSLA) and data storage platform Pure Storage Inc (NYSE:PSTG), though pay-TV operator DISH Network Corp (NASDAQ:DISH) is sitting out the day’s rally. Here’s a closer look at what’s moving shares of TSLA, PSTG, and DISH.

Tesla Stock Jumps on Model 3 Production Buzz

Tesla stock was trading near its highest levels since late October earlier — topping out at $349 — after JPM reported on the company’s private investor meeting at the Detroit Auto Show. The brokerage firm said TSLA’s head of investment relations indicated Model 3 production will reach 1,000 cars per week this month — an increase from fourth-quarter numbers, with the recent bottleneck issues resolved.

However, TSLA shares have since pared a portion of these gains, last seen trading up 2% at $347.00, after the Nikkei published an article critiquing the company’s financial backdrop. Today’s price action is still impressive — and brings Tesla’s 2018 return to 11.8% — and call volume is running at an accelerated clip, with around 81,000 contracts traded.

Most active is the January 2018 350-strike call, where there looks to be a mix of buy- and sell-to-open activity happening. Those purchasing the calls expect TSLA to rally past $350 by front-month expiration at tomorrow’s close, while those writing the calls are setting a short-term ceiling.

Pure Storage Stock Disappoints Put Buyers

Barclays upgraded Pure Storage stock to “overweight” from “equal weight,” and raised its price target to $22 from $19 — in uncharted territory. In reaction, PSTG shares are up 10.5% to trade at $17.87.

Longer term, the equity has tacked on more than 51% over the past 12 months. And while PSTG stock recently pulled back from its Nov. 28 two-year high of $19.28, it bounced off its 100-day moving average, and is now trading north of $16.85 — a 23.6% Fibonacci retracement of its 2017 surge.

Some options traders took the wrong side on PSTG stock late last year. The January 2018 15-strike put is home to peak open interest of 30,459 contracts. The bulk of this activity occurred back on Dec. 5, when the shares were trading around $17, and Trade-Alert pegs most of the activity as buy-to-open.

DISH Network Stock Downgraded on Wireless Cost Concerns

DISH Network stock is down 4.9% to trade at $45.66 — earlier hitting an annual low of $45.14 — after Morgan Stanley cut its rating to “equal weight” from “overweight,” expressing concern over the costs of the cable operator’s entry into the wireless industry.

The stock’s slide from its mid-July high near $66.50 has been swift, with DISH shares down more than 31%. The equity’s 50-day and 80-day moving averages have emerged as stiff resistance, too, rejecting recent rally attempts.

Short sellers have been cashing in on their winning bets, too. Short interest fell 17.6% in the two most recent reporting periods, to 12.48 million shares, the fewest since December 2016. DISH stock’s inability to capitalize on this burst of buying power speaks to its underlying weakness.

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