Call Buying on Yahoo (YHOO) Offers Insight for Traders

08/18/2009 10:07 am EST

Focus: STOCKS

Nick Perry

Equity Options Trader, Schaeffer's Investment Research

This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's call volume on the ISE is at least twice as great as the put volume. It then sorts the stocks based on the call volume. Since this is buy-to-open data, this can be a good source for finding stocks where optimism is emerging.

Of particular interest to me would be situations where we see call activity on stocks that are still in intermediate-term downtrends. This would be a potentially cautionary sign from the contrarian perspective.

Of particular interest is Yahoo (YHOO). The shares were retreating from resistance and nearing short-term support. The updated chart below shows the stock is still holding above 14.20 but has yet to show any signs of rebounding. I would keep a cautious eye on the shares if they break that zone.


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By Nick Perry of Schaeffer’s Trading Floor Blog

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