EMC Nearing Technical Resistance

06/10/2009 10:14 am EST


Elizabeth Harrow

Director of Digital Content, Schaeffer's Investment Research, Inc.

Option traders have adopted a skeptical stance toward EMC Corporation (EMC). During the past two weeks, traders on the International Securities Exchange (ISE) have bought to open 35,319 puts on EMC, compared to 12,116 calls. In other words, 2.92 times more puts than calls have been purchased during the past ten days.

EMC price chartThe stock's current ISE ten-day put/call volume ratio ranks higher than 97.6% of other such readings taken during the past year, revealing that bearish bets on the equity have rarely been purchased at a faster pace.

In the same vein, EMC's Schaeffer's put/call open interest ratio (SOIR) is also resting at elevated levels. The current SOIR of 0.80 ranks in the 70th annual percentile, indicating that short-term option players have been more pessimistically aligned less than one-third of the time during the past 52 weeks.

Skeptical speculators might be eyeing looming resistance at the $13 level, a site of former support which has more recently acted as resistance. The stock has finished just one week above this region since last October.

By Elizabeth Harrow of Schaeffer’s Trading Floor Blog


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