Shares of DraftKings (NASDAQ:DKNG) have been on a tear since the IPO in late April. DraftKings stock has more than doubled in that time frame. It has benefited from the stay at home orders as bettors no longer could head to the casinos.Source: Lori Butcher/Shutterstock.com Certainly some of the move higher was warranted given the uptick in platform use and the increased likelihood of more states legalizing gambling to bring in much needed revenues. The red-hot rally has now come too far, too fast. Time to cash in your bets on DKNG. Fundamental FocusMatt McCall and the InvestorPlace Research Staff put together an outstanding research report yesterday. They highlighted many reasons to like DraftKings stock going forward, but wouldn't be a buyer at current levels due to valuation concerns. Instead they recommend waiting for a pullback before buying DraftKings stock.InvestorPlace – Stock Market News, Stock Advice & Trading TipsThe average analyst price target is just $38.57, which is below the most recent closing price of $40.53. Susquehanna analyst Joseph Stauff did just up his price target recently to $48, while Cannacord Genuity analysts Michael Graham has a street high $50 price target. Both of these price targets imply limited upside from here for such a volatile stock like DKNG. * 7 Hotel Stocks to Buy Before Vacationing Restarts Technical TakeDraftKings stock has been overbought for a while but is finally starting to lose some steam. 14-day RSI has turned lower after reaching an extreme. MACD is also beginning to weaken. Momentum has finally pulled back somewhat after getting to seriously over-exuberant levels. Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade Most importantly, DKNG stock had a key reversal day after making a new all-time high of $44.79 on Tuesday. Shares opened near the highs but immediately began to pull back. Ultimately DraftKings stock closed sharply lower on the day.This type of price action is many times a reliable signal that the previous trend has come to an end. The buyers have become exhausted and the sellers have taken control. It is even more powerful given the magnitude of the previous rally. Volatility ViewThe options market can provide good insights into the speculative fever surrounding big time momentum stocks. Traders can glean some solid information looking at at the option volume broken down between calls and puts.The table below shows the enormous appetite for call options with 3.4 calls trading for every put. This type of over-exuberance is usually a reliable contrarian indicator that the rally may be getting overextended.Source: The thinkorswim® platform from TD AmeritradeNormally out-of-the-money puts carry a higher implied volatility (IV) than similar out-of-the-money calls. A look at the Apple (NASDAQ:AAPL) option montage shows that the June $310 puts are trading at a 26 IV, while the June $340 calls are trading at just a 21.50 IV. Both options are roughly equidistantly (12.5 points) out of the money. This is typical for most stock options. Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade DKNG options, however, exhibit what is called a reverse skew. The calls carry a much higher IV than the similarly out of the money puts.The June $35 puts are trading at a 92 IV while the June $46 calls are trading at over a 98 IV. Both options are roughly 5.5 points out of the money. This type of option pricing anomaly is rare and invariably a signal that the rush for upside exposure has reached an extreme. Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade The high level of comparative IV also sets up ideally for selling these expensive calls to structure a guardedly bearish trade. So to position for the red-hot rally to stall, a simple bear call spread makes probabilistic sense. Trade IdeaSell the DKNG June $50/$55 call spread for a 50 cents net credit.Maximum gain of the trade is $50 per spread with maximum risk of $450 per spread. Return on risk is 11.11%. The short $50 strike price provides a 23% upside cushion to the $40.53 closing price for DKNG stock. It is also above the upgraded $48 price target from Susquehanna and right at the highest price target of $50.As of this writing, Tim Biggam did not hold a position in any of the aforementioned securities. Anyone interested in finding out more about option-based strategies or for a weekly option and volatility newsletter can visit the Options and Volatility Newsletter website. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post DraftKings Stock Is No Longer a Good Bet at These Prices appeared first on InvestorPlace.

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Mexico will not join other top oil producers in extending through July output cuts aimed at propping up the price of crude, Energy Minister Rocio Nahle said on Saturday. Made up of OPEC members and allies led by Russia, the group known as OPEC+ agreed in April to cut oil supply by 9.7 million barrels per day (bpd) in May and June to support prices. Under that deal, Mexico pledged to reduce its crude output by 100,000 bpd in May and June, after resisting pressure from other oil producers to make cuts of 400,000 bpd.

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Yahoo Finance’s Alexis Christoforous and Brian Sozzi speak to Slack CFO Allen Shim about its latest earnings report, how the COVID-19 pandemic has created ‘a new category,’new customers including Verizon and Amazon and more.

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Royal Caribbean (NYSE:RCL) is having itself a month. RCL stock is up over 40% since the beginning of May on what can only be described as discount shopping at the clearance rack. Right now, it seems that investors keep buying the stock as if they're afraid of missing out on the next leg up.Source: Laszlo Halasi / Shutterstock.com The problem with that thinking is that Royal Caribbean had already nearly doubled from where it had fallen in March. And at around $40 per share, RCL stock felt a little ahead of itself. So, with a stock price nearing $60 per share, it seems like a classic case of investors who have a fear of missing out (FOMO). Royal Caribbean Is Not to BlameLike all cruise lines, Royal Caribbean saw its stock price plummet in March as the Covid-19 pandemic forced a complete suspension of operations. The cruise line industry is no stranger to overcoming situations regarding shipborne illnesses. But the nature of the novel coronavirus and its potential to be transmitted asymptomatically is a particular problem for an industry that relies on having a captive audience for days or even weeks.InvestorPlace – Stock Market News, Stock Advice & Trading TipsThen you throw in the possibility of being quarantined on a cruise ship (those cabins aren't that big) and you can understand why many cruise line passengers may be taking a wait-and-see approach. * 7 Hotel Stocks to Buy Before Vacationing Restarts In early May, I questioned if the stock was priced too high at $41 per share. Since then, the company reported its first-quarter earnings. And it announced that it would not start sailing again until August 1, 2020. That's a month longer than previously planned.The company also said that forward bookings for the remainder of 2020 were "meaningfully lower" on a year-over-year basis. The Future Revenue Picture Is Still Not ClearLast year, Royal Caribbean brought in about $10.6 billion in revenue. On the conference call to discuss first quarter earnings in May, Jason Liberty, RCL's CFO announced that the company had cut back on capacity by 25%.Liberty also stated that Royal Caribbean, like every other cruise line, was offering its guests who had their cruises suspended the option to receive a 125% future cruise certificate (FCC) in lieu of a cash refund. However, as of the earnings call, approximately half (45%) of guests had asked for a refund.On the face of it, retaining approximately half of potential revenue would seem like "less bad" news. But here's something else to remember about the future cruise certificates. In a blog post from the company, Royal Caribbean stated "the deadline to request to change a future cruise credit to a refund deadline is December 31, 2020."It makes sense that many customers will want to take a wait-and-see attitude. If cruise lines begin to sail without incident, they can book a trip. If they don't, they can get their cash refund.The company did say about 20% of the guests who have an FCC have already rebooked future cruises. But here's the rest of that story. On the same conference call, Chairman and CEO Richard Fain spoke about Royal Caribbean's Cruise with Confidence program that allows guests to cancel a booking up to 48 hours before the cruise is set to sail.All of this put together makes a tricky revenue picture even more complex. RCL stock seems priced for the company to realize all available revenue. And that seems unlikely. You Can Wait on RCL StockCovid-19 and the novel coronavirus that causes it will continue to infect cruise lines for quite some time. Fain confidently told investors that he was confident the cruise industry would bounce back similar to what occurred after 9/11.I do believe that people will continue to cruise. As treatments, and possibly a vaccine, become available, the number of passengers should increase. But right now, RCL stock has a price-earnings ratio of over 60 at a time when the cruise line is burning through between $250 million to $275 million per month.My InvestorPlace colleague Todd Shriber has a different opinion. Shriber suggests that you can't wait for the right time to buy cruise line stocks because the market will already have beaten you to it. He also says RCL's forward bookings are within historical ranges.I understand his point, but I don't agree with it. There are times when things can be simple. RCL stock is needlessly expensive at the current price. I want to see revenue before I'm going to overpay for a cruise line stock.Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019. As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post Therea€™s No Reason to Have FOMO About Royal Caribbean appeared first on InvestorPlace.

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Almost every company could use some positive developments following the novel coronavirus. Arguably, General Electric (NYSE:GE) needs it the most. Even before the pandemic, the once-mighty industrial giant needed everything to go smoothly to lend credibility to its low-probability recovery initiative. But like with the pandemic, everything that could go wrong, did go wrong for GE stock.Source: Sergey Kohl / Shutterstock.com As the health crisis spread, General Electric saw much of its market value evaporate over a matter of days. In that, it was much like so many other publicly traded companies. But the extra cruelty for investors who were still holding the shares, GE stock couldn't even get a proper dead cat bounce. While it briefly managed to get itself out of the hole from its March lows, shares again suffered pressure. Last month, they hit a low that was more shocking than what transpired in March.However, the market gods appeared to show some mercy. Recently, Boeing (NYSE:BA) saw its equity value rise dramatically as the beleaguered company was able to keep two of its 737 Max jetliner customers on the books. SMBC Aviation Capital and AerCap (NYSE:AER), both aircraft leasing firms, decided to defer delivery of their Max orders.InvestorPlace – Stock Market News, Stock Advice & Trading TipsTrue, a deferral isn't the best outcome. But when you have a sea of cancellations to contend with, deferrals keep the business running. And this has very encouraging implications for GE stock. As you know, General Electric makes the LEAP engine that underlines the Max.So, is this an opportunity to jump back into the GE recovery story? I'm afraid not. We have to remember that General Electric was already hurting from the Max fatalities that grounded the otherwise popular jet. Now, we have a pandemic that almost ensures a drawn-out recovery process. Passenger Volume is a Serious Threat to GE StockIf that doesn't give you pause about General Electric stock, consider that one of the reasons traders gambled on it last year was the anticipation that the Max would fly again soon. Sure, passengers were worried, but they typically tend to forget about travel-related disasters, perhaps because they are such low-probability events. * 7 Hotel Stocks to Buy Before Vacationing Restarts Unfortunately, that's not the case with the coronavirus. Although you're very unlikely to contract Covid-19 on any given day, situational probabilities increase depending on your circumstances. For instance, if you're in a flying tube where social distancing is all but impossible — even with unoccupied middle seats — the risk of infection is presumably far greater than quarantining at home.Needless to say, without air travel demand, GE stock is stuck in a battle of inevitability. Currently, airliners see little reason to purchase new aircraft with passenger volumes at ridiculously low levels. Yes, we've seen photos of packed airplanes. However, this stems from air carriers cutting redundant routes to avoid racking up unnecessary costs.Interestingly, it's the same recovery narrative — that demand will eventually return soon — that has driven not only GE stock but also direct players like United Airlines (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL). But does the data support such optimism?I'm skeptical. On May 31, the Transportation Security Administration screened just under 353,000 passengers. This is a huge lift from the lows of April, when the TSA on some days screened fewer than 100,000 flyers. However, this recent figure only represents less than 14% of travel demand from the year-ago period. Click to EnlargeSource: Chart by Josh Enomoto Moreover, travel demand has overall been moving very slowly. In the first half of April, the daily number of passengers screened was only 4.4% of the year-ago level. This metric improved to 7.6% in the first half of May, and to 11.5% in the second half of May.Still, these are terrible figures. Simply put, the airliner industry as it stands cannot survive on a fraction of the demand typically carried. Worse yet, we just don't know when demand will truly normalize, placing GE stock in limbo. Social Unrest is Another Shocking HeadacheAs if that wasn't bad enough, just when most states — including the powerhouses like California and New York — were on the cusp of reopening vast portions of their economies, a wave of protests swept the nation.Granted, the calls for social equality and justice are incredibly compelling and relevant during this fractured time. Further, these protests will probably continue for longer than many might imagine. Truly, they reflect not only racial struggles, but class struggles as well. Keep in mind that millions of Americans are still unemployed.But for GE stock, this is again another example of unwanted developments. First, these protests — some of which have turned shockingly violent — dissuade air travel. Again, without this demand, the need for airplane engines diminishes.Second, I can't help but notice that social distancing and protesting don't go hand-in-hand. Therefore, I think it's only fair to assume that coronavirus cases will accelerate. Worryingly, new daily cases in the U.S. stubbornly remain at the 20,000 level. I'm sure the protests aren't helping matters.So, if we do have second wave of the coronavirus, the travel industry will surely succumb to revamped fears. And that might be it for GE stock. While I'm sympathetic to the company's recovery efforts, there are too many variables at work here.A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * Top Stock Picker Reveals His Next 1,000% Winner * The 1 Stock All Retirees Must Own * Look What America's Richest Family Is Investing in Now The post General Electric is Losing Credibility Amid Multiple Crises appeared first on InvestorPlace.

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