PLUG Unusual Option Activity Report
It hasn’t been a week since Plug Power Inc (NASDAQ: PLUG) dropped around 8%. The reason for the decline was on news of a $750 million share offering. However, that was then, and this is now. The share price surged 10.3% on Monday as Baron’s discussed the PLUG as a standout stock in 2020. As a hydrogen fuel cell maker, the car isn’t exactly running away with it in terms of revenue growth. However, the alternative auto space is surging right now, and investors are reaching for the next trade.
That’s what happened on Monday. Option traders turned to PLUG in a big way and the price reached for new 52-week highs in the process. This surge in bullish option activity may be an indication that PLUG may be next in the ever-expanding range of speculative interest in this space.
PLUG Option Activity
Plug Power finished the session with call option volume that was nearly double the average. Nearly 49% of the call volume got filled at the ask. The put-to-call ratio was 0.205, which showed five times more call volume than put volume. Over 15% of the volume happened on a single call option contract for the December expiration. Here’s the details of the activity:
- 36,369 18 DEC 20 $35 calls mostly BOT quickly for $0.47 to $1.01 against open interest of 1,483.
The trades that were made is a good example of a sweep. There was a flurry of activity for about seven minutes as the price of the stock and the option surged. The surge in call option buying occurred with just less than two hours until the closing bell.
The image below is a one-minute chart of the stock and option contract and reflects the bullish activity well.
PLUG Technicals
PLUG established support last week at $22 following the decline on November 17. The price gapped lower on that day on 78.9 million shares, over double the average. The price tipped its hand in that the stock was able to rally off of the low of the session at $22 to close just under $23. This was an early indication of exhaustion on the part of sellers.
Prior to the gap lower on the announcement of a stock offering, the price had made around a $12 run off of its prior support near $13.50. Assuming the price trend continues this pattern, it would indicate a potential target of $34 in the coming weeks. Monday’s significant move on above average volume certainly helped provide confirmation of that potential.
Conclusion
As you consider both the technical analysis and option activity of PLUG, the indication is a move toward $34 to $35 by December’s expiration. The selection of a $35 strike and the significance of the activity certainly helps demonstrate some level of conviction of what may be expected to transpire. While the movement in this space is certainly already been extreme, Monday may be an early indication of PLUG being next in line for a significant parabolic move.
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