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Option Traders Think Fisker Might Confirm A Bull Break

April 20, 2021 4:15 pm
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Option Traders Think Fisker Might Confirm A Bull Break

Fisker Inc (NYSE:FSR) gapped up 11% at Tuesday's open from Monday’s close due to two factors aligning.

  • Bank of America initiated coverage on Fisker, giving it a Buy rating and a price target of $31.
  • The stock has been trading in a bullish falling wedge since Feb. 26 and was set to reach the apex of the wedge Thursday.

When a number of factors align on a stock a large move can happen more easily and on Tuesday morning some options traders noticed the stars were aligning for beaten down Fisker and bet more than $256,944 the stock is going higher.

The Fisker Option Trades: At 9:34 a.m., Tuesday a trader executed a call sweep, near the ask, of 660 Fisker options with a $14 strike price expiring on April 23. The trade represented a $47,520 bullish bet for which the trader paid 72 cents per option contract.

At 9:35 a.m., a trader executed a call sweep, near the ask, of 247 Fisker options with a $14 strike price expiring on April 30. The trade represented a $30,875 bullish bet for which the trader paid $1.25 per option contract.

At 9:35 a.m., a trader executed a call sweep, near the ask, of 275 Fisker options with a $15 strike price expiring on June 18. The trade represented a $46,930 bullish bet for which the trader paid $1.90 per option contract.

At 9:45 a.m., a trader executed a call sweep, near the ask, of 493 Fisker options with a $15 strike price expiring on May 7. The trade represented a $46,342 bullish bet for which the trader paid 94 cents per option contract.

At 9:48 p.m., a trader executed a call sweep, near the ask, of 647 Fisker options with a $15 strike price expiring on April 23. The trade represented a $47,231 bullish bet for which the trader paid 73 cents per option contract.

At 9:58 p.m., a trader executed a call sweep, near the ask, of 373 Fisker options with a $14 strike price expiring on April 23. The trade represented a $38,046 bullish bet for which the trader paid $1.02 per option contract.

The Fisker Chart: Fisker’s stock reached an all-time high of $31.96 on March 2 and has been in a steep downtrend since. There is an identifiable falling wedge around the downtrend, however, which is bullish.

Fisker is trading below both the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending below the 21-day EMA which is bearish. On Tuesday, when Fisker’s stock broke bullish from the falling wedge, the eight-day EMA acted as resistance and at midday the stock retested the top descending trendline of the falling wedge.

Related Link: What's Going On With FSR Stock And FUTU Stock Today?

Bulls want to see Fisker’s stock hold above the falling wedge and for enough bull volume to come into the stock so it can break up over the $14.32 resistance level. If it can break above that resistance, it has room to move towards the $16 mark.

Bears want to see Fisker’s stock fall back into the falling wedge and trend down until it is pushed under support at $11.87. If Fisker were to lose that support level, it could fall further towards $10.95.

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FSR Price Action: Shares of Fisker closed up 4.5% at $12.93.


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