Tuesday, May 12, 2009

Option Skews - Relatively Heavy Put Activity on Baidu Inc, Trina Solar Limited, and Potash Corp. of Saskatchewan (BIDU; POT; TSL)

BIDU was recently down 1%, POT and TSL up 7 and 9% respectively.
From Schaeffers Trading Floor blog:

Baidu Inc. (BIDU), Trina Solar Limited (TSL), and Potash Corp. of Saskatchewan (POT) were among the stocks showing a bias toward put buying Monday.

The activity on Potash Corp just adds to what we saw yesterday and Friday. A look to the current chart shows the stock is still trying to breakout.

All it takes is a quick glance at the daily chart of Baidu Inc to see that the put buys could be considered counter-trend sentiment. The stock has staged a monster rally off its recent lows. The shares are currently showing a near-term pullback from an overbought condition but clearly buyers have been willing to aggressively chase the stock.

This chart of Trina Solar shows the equity recently found a base near 6, pushed through resistance near 10, and then overtook resistance near 15. The shares are up more than 90% in the last 13 weeks yet option buyers on the International Securities Exchange showed little in the way of optimism yesterday....MORE