At least that was my first reaction to this Schaeffer's Research headline:
Put Players Pummel Cree, Inc. and Potash Corp. of SaskatchewanHere's the story:
Put buying is nearing climactic levels on Cree, Inc. (CREE) and Potash Corp. of Saskatchewan (POT), according to data from the International Securities Exchange (ISE). With both stocks boasting 10-day ISE put/call volume ratios in annual-high territory, it's worth taking a look to see whether this heavy-handed pessimism is deserved.
First up, CREE's 10-day ISE put/call volume ratio weighs in at 2.78, with puts bought to open roughly tripling calls during this time frame. This ratio ranks higher than 98.8% of other such readings taken during the past year, just 1.2 percentage points away from a 52-week peak.
Following a recent pullback, CREE is trading just below its formerly supportive 10-week and 20-week moving averages. This technical dip may have inspired a wave of bearish speculation, but the equity's longer-term uptrend has hardly fizzled -- CREE's decline was neatly contained by its 32-week moving average, along with a little help from the round-number $60 region.
Going forward, contrarians will want to keep an eye on CREE's progress near the looming $70 level. A successful surge above this region would set the shares back atop their 10-week and 20-week moving averages, potentially sparking a rush to cover among bearish bettors....MORE