Is Big Money Watching For Meme Squeeze Part 3?

Hey Traders,

Today I want to take a look at a Big Money trade targeting a former (and possibly future!) meme name.

A lot of times when I see Big Money making a decisive move on a stock …

I’ll look into a potential piggyback myself.

Big Money traders often have access to information that we don’t have, so they’re able to make their moves early.

Seeing and interpreting Big Money moves can help you spot trade candidates early, so you can move in and out with Big Money cues …

And hopefully some Big Money level profits!

But … in this case …

This is a trade I will NOT be taking.

Big Money Energy

Camber Energy (Ticker: CEI) has come under fire from meme traders several times, squeezing higher in February …

Chart courtesy StockCharts

And exploding higher in late September before plummeting back down to earth.

With CEI closing on Tuesday at $1.34, the shares are still well off their August low of $0.33 …

But also still quite a ways away from their meme peak at $4.85!

What happened to the meme stock squeeze?

The shares started moving higher in late August after news broke that a CEI subsidiary had struck a deal to provide their patented carbon capture technology to ESG Clean Energy …

But really, if you look at the volume bars on the chart …

A surge of social media and Reddit attention is more likely what caused the shares to balloon nearly 1,000% in less than one month.

However, profit taking and a critical short report from hedge fund Kerrisdale Capital caused the shares to quickly retreat from their meme highs. The report out of Kerrisdale alleged, among other things, that CEI would soon be delisted, and that their fully diluted share count would be more than triple what the company currently reports.

However, the shares are still maintaining above their pre-squeeze lows.

If we zoom in to take a closer look at the more recent price action …

You’ll notice a few recent volume peaks that have helped the shares gap higher …

And they’re more or less holding onto those gains so far.

Interestingly, recent reports show that short sellers have recently been piling onto the shares, with 13% of Camber’s float now sold short.

Maybe that’s why traders who have been targeting the energy stock for a short squeeze don’t seem to be deterred by CEI’s slow creep lower …

On Monday, CEI announced it had been granted its request to deliver a delayed earnings report, and the shares spiked 19%.

Meanwhile, one Smart Money trader made a bullish bet …

With CEI trading higher on the day, this trader bought 3,514 contracts of the November 26 2-strike calls.

That’s a fairly hearty $35,140 bet that CEI gains a minimum of 56% by the end of the holiday-shortened week!

What are the rest of the pits saying?

Well, for one, they’re much busier than usual, with CEI’s pits seeing a whopping 294% of their usual daily volume on Tuesday … although that was still only a grand total of 44,691 contracts traded over the course of the trading session.

Calls outnumbered puts nearly five-to-one … but that doesn’t mean all of this call action was opening.

In fact, it looks like some traders are cutting and running out ahead of this Friday’s weekly expiration.

Prior to Tuesday’s trading session, CEI’s most popular options contract was the November 26 1.5-strike calls, with more than 25,000 contracts of open interest.

However, this contract saw more than 10,000 contracts cross the tape …

And with CEI below the $1.50 mark, and just 1.5 trading days until expiration, I think many of these traders were likely limiting their losses.

So Big Money’s bullish bet on Monday …

Seems to contradict the retail masses on Tuesday!

Who knows … maybe that Big Money trader knew something we don’t …

But I’ll be staying on the sidelines for this one.

Your Only Option,

Mark Sebastian

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