Comcast Stock Flies In Blue Skies: What's Next?

Comcast Corp CMCSA recently announced a collaboration with ViacomCBS Inc VIAC a new subscription video-on-demand service in Europe in 2022.

On Monday, Comcast made a new all-time high of $59.93 and was attempting a blue-sky run. Two institutions jumped on the bandwagon and purchased $273,100 worth of bullish call contracts. Both orders had a conservative strike price of $60 with one order expiring on Sept. 17 and the other on Oct. 15.

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 or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of 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.

The CMCSA Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 10:58 a.m., a trader executed a call sweep near the ask of 1500 Comcast options with a strike price of $60 expiring on Oct. 15. The trade represented a $235,500 bullish bet for which the trader paid $1.57 per option contract.
• At 11:31 a.m., a trader executed a call sweep near the ask of 376 Comcast options with a strike price of $60 expiring on Sept. 17. The trade represented a $37,600 bullish bet for which the trader paid $1 per option contract.

The CMCSA Chart: Comcast opened lower but immediately shot up to make a new all-time high. At 11 a.m. ET, the stock began to trade sideways on smaller timeframes due to low volume. By mid-day, only 4.41 million shares of Comcast had changed hands compared to the stock’s average 10-day volume of 11.2 million.

The sideways consolidation was needed to help Comcast garner enough strength for a big blue-sky run and at 12:30 p.m. volume began to increase and Comcast broke up from the bull flag it had created on the 15-minute chart.

If the stock closes the trading day near its high of day, it will print a Marubozu candlestick which also indicates higher prices may be in the cards and the stock will continue to run higher on Tuesday.

Comcast is trading above the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading about 10% above the 200-day simple moving average which indicates overall sentiment in Comcast is bullish.

• Bulls want to see big bullish volume come in to confirm the break into blue-skies. Comcast has no further resistance above in the form of price history.
• Bears want to see big bearish volume come in and drop Comcast’s stock back down below its previous all-time high of $59.70. If the stock can’t hold the level as support it could fall back toward $57.24.

Photo: Mike Mozart via Wikimedia