Clover Health Stock Options Traders Are Betting It's Going Higher

Clover Health Investments Corp CLOV is up 28% from Wednesday’s close due to three factors that are aligning:

News: Clover Health has become a top target in the r/WallStreetBets Reddit community. 

Short Interest: As of Friday, the short interest in Clover Health stood at 36%, with 89,341,692 of 248,802,100 shares being short volume.

The Chart: The stock found a new bottom and began trading sideways, indicating an accumulation of shares was taking place.

When a number of factors align on a stock, a large move can occur more easily, and on Monday morning some options traders noticed the stars were aligning for beaten-down Clover Health and bet more than $419,732 that the stock is going higher.

Related Link: Clover Health Stock Rally Continues Despite Confusion Over Short Interest

The Clover Health Option Trades: At 9:32 a.m., Monday, a trader executed a call sweep above the ask of 298 Clover Health options with a $10 strike price expiring on May 21. The trade represented a $53,640 bullish bet for which the trader paid $1.80 per option contract.

At 9:49 a.m., a trader executed a call sweep above the ask of 270 Clover Health options with a $10 strike price expiring on May 21. The trade represented a $50,220 bullish bet for which the trader paid $1.86 per option contract.

At 9:49 a.m., a trader executed a call sweep above the ask of 548 Clover Health options with a $10 strike price expiring on May 21. The trade represented a $89,872 bullish bet for which the trader paid $1.64 per option contract.

At 9:56 a.m., a trader executed a call sweep above the ask of 300 Clover Health options with a $12.50 strike price expiring on May 21. The trade represented a $68,400 bullish bet for which the trader paid $2.28 per option contract.

At 9:59 p.m., a trader executed a call sweep above the ask of 1,001 Clover Health options with a $15 strike price expiring on May 21. The trade represented a $100,100 bullish bet for which the trader paid $1 per option contract.

At 10:36 p.m., a trader executed a call sweep above the ask of 550 Clover Health options with a $12.50 strike price expiring on May 21. The trade represented a $57,750 bullish bet for which the trader paid $1.05 per option contract.

The Clover Health Chart: Clover Health’s stock reached an all-time low $6.31 on March 5 following a steep downtrend caused by a short report issued by Hindenburg Research on Feb. 4.

The stock then became rangebound, trading sideways for 29 trading days between its $7.30 support and $8.99 resistance levels.

On Friday, big bullish volume came into the chart, which gave the indication higher prices may come in the future.

On Monday, Clover Health’s stock opened higher at $9.62 which put it above resistance and forced the eight-day exponential moving average to cross above the 21-day EMA, which is bullish.

The stock was able to clear two more resistance levels before being sold and entering into daily consolidation.

Bulls want to see consolidation take place for Clover Health’s stock to gather enough steam to bust back through the $9.94 and $10.61 resistance levels to start making its way north.

Bears want to see bear volume increase to knock Clover Health’s stock back down into the channel near the all-time lows.