A couple of weeks ago, a 13F filing by Berkshire revealed that the company had added to its holdings of Kroger Co (NYSE: KR). While Buffett isn’t the influencer for Millennial stock traders like the twerking, pink-haired talking heads on TikTok or YouTube, his trades still influence more “seasoned” investors. That influence has been seen through the rally in the price since August 17, 2021.

Kroger Resistance

You may be wondering why I’m questioning the end of the Buffett bounce for Kroger when the stock is trading over 2.5% higher today at the time of this writing. As you may know, I frequently discuss unusual option activity during my daily TheoTrade session and on my posts. While the price has been bought, there has been persistent bearish put activity all the way up!

While the activity has mostly been slightly OTM options near the $45 to $46 strike price. Most of the trades occurred the last time the price was testing $47. As the price rocketed past $47, the put buyers came back in today as the price faded back to the all-important $47 level.

Kroger Unusual Option Activity

Today’s option activity isn’t exactly a bearish profile. Nearly half of the calls and puts traded have been in between the bid and ask, with a near equal split of options getting filled at the bid and ask. The one sign for potential price movement is the volume traded today. The sizzle index is currently at 3.6 and the call and put sizzle is pretty near that level as well. In fact, the call and put volume is about equal today making the put-to-call ratio close to one.

Like most things in life, the devil is in the details. Here is a breakdown of today’s option activity for Kroger:

• 4,000 17 SEP 21 $46.50 puts mostly BOT @ $0.66 to $0.70

The above activity for Kroger came quickly in a two-minute span as the price was falling back toward $47. In the chart below, you’ll see the option activity on the right aligning with the share price testing $47.

(Click on image to enlarge)

Conclusion

There are few absolutes in trading, only indications. For traders willing to look where the money flow is going, unusual option activity can give an indication for potential volatility. That volatility is the lifeblood for traders. Today’s activity may be the icing on the cake of the cumulative bearish activity over the past couple of weeks and the fade from the daily high on Kroger is the cherry.