Altera at 10-year resistance level

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Altera has stalled after hitting a key resistance level from late 2001, and the bears are looking for a correction.

ALTR Chart optionMONSTER's Depth Charge tracking system detected the purchase of 3,260 May 27 puts for $1.40 against open interest of 238 contracts. The shares need to decline less than 3 percent for the trade to turn a profit.

ALTR fell 1.88 percent to $26.12 in morning trading. The chipmaker has spent the last two weeks consolidating between $26 and $27. Shares traded as high as $27.48 after a strong earnings report on April 20, about the same level where they peaked in the wake of the dot-com bubble collapse in December 2001.

Today's trader received a delta of -0.68, meaning that their puts will appreciate $0.68 for every $1 that ALTR falls. Buying in-the-money contracts lets traders profit from smaller moves in a stock price, but requires a greater outlay of capital than out-of-the money options.

Overall in ALTR puts outnumber calls by almost 11 to 1, which reflects the bearish sentiment toward the stock.

(Chart courtesy of tradeMONSTER)



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: ALTR

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