fbpx
QQQ
-4.12
330.51
-1.26%
DIA
-1.26
345.49
-0.37%
SPY
-2.36
418.85
-0.57%
TLT
-0.12
137.20
-0.09%
GLD
+ 2.20
170.49
+ 1.27%

Skillz Makes A Bullish Breakaway And Options Traders Think There's More Where That Came From

April 21, 2021 1:36 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Skillz Makes A Bullish Breakaway And Options Traders Think There's More Where That Came From

After reaching an all-time high of $46.30 on Feb. 10, Skillz Inc (NYSE:SKLZ) has been in a steep downtrend that has forced the stock back to late 2020 prices.

The iGaming sector has been beaten down the past few months following a lull in news catalysts.

On Wednesday morning, however, Skillz made an upwards breakaway indicating the bottom may be in and some bullish options traders agree.

The Skillz Chart: Skillz broke up from the downward sloping trendline that has pushed it south 72% from its highs. Finding support at the $12.50 mark, Skillz’ stock was able to bounce up to its next resistance level at $15.90. At midday, Skillz was attempting to break over that resistance level.

The bounce helped Skillz’ stock to regain the eight-day exponential average (EMA), which is bullish, but the eight-day EMA is still trending well below the 21-day EMA indicating the stock has a lot more work to do to make it into the clear.

Bulls want to see sustained bull volume over the coming days and for Skillz to reach its pop over its next resistance level at $18.10. If it can regain that level, it has room to push towards $23.23.

Bears want to see Wednesday’s bullish volume followed by bear volume to knock the stock back down below the descending trendline. If the Skillz falls back below the trendline, it will likely lose its support zone at $12.50 and could then revisit a lower support level at $9.95.

Related Link: Michigan Online Sports Betting March Figures Show Strength For Several Players And One Surprising Decliner

screenshot_96.png

The Skillz Option Trades: Below is a look at the notable option alerts, courtesy of Benzinga Pro:

  • At 10:04 a.m., Wednesday a trader executed a call sweep, near the ask, of 200 Skillz options with a $15 strike price expiring on Dec. 17. The trade represented an $84,400 bullish bet for which the trader paid $4.22 per option contract.
  • At 11.57 a.m., a trader executed a call sweep, above the ask, of 200 Skillz options with a $17.50 strike price expiring on May 7. The trade represented a $26,800 bullish bet for which the trader paid $1.34 per option contract.
  • At 12.18 p.m., a trader executed a call sweep, above the ask, of 200 Skillz options with a $15 strike price expiring on April 23. The trade represented a $25,000 bullish bet for which the trader paid $1.25 per option contract.

Together traders are betting over $136,200 the share price is going higher.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

SKLZ Price Action: Shares of Skillz were trading up 28.8% to $16.17 at last check.


Related Articles

Skillz Was Shot Down And Needs An Earnings Win

Skillz Inc (NYSE: SKLZ) is set to report earnings after the close Tuesday amid bearish sentiment in the stock. read more

Why Cathie Wood Is Bullish On Skillz

Cathie Wood-led Ark Investment Management believes the mobile gaming company Skillz Inc (NYSE: SKLZ) has been a victim of misunderstanding after recent short-seller allegations against the company related to its revenue recognition practices and its NFL partnership. read more

Skillz Pulls Back: Technical Levels To Watch

Skillz Inc.(NYSE: SKLZ) shares pulled back Friday after outperforming analysts' expectations for the first quarter of 2021. read more

3 Gaming Stocks To Play Other Than Roblox

Gaming stocks have soared over the past year as children and adults alike searched for ways to pass the time while being stuck at home during COVID-19 pandemic stay-at-home orders. read more