Bear draws line in sand on H&R Block

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Someone must be watching the 200-day moving average on H&R Block.

optionMONSTER's Depth Charge tracking system detected heavy put activity as the stock tried to rally through that level (purple line on chart), suggesting that at least one trader expects the tax preparation company to resume its push to the downside.

HRB Chart More than 3,700 July 18 contracts were bought for $0.75 to $0.90 against open interest of just 886. The trade accounted for almost all the activity in the stock today and pushed overall options volume to more than twice the average level.

HRB fell 0.89 percent to $18.74 in morning trading and is down 17 percent so far this year. The stock gapped lows on Feb. 24 after cutting its full-year earnings forecast because more customers were doing their own taxes. Last week, HRB said the number of returns it processed fell by 6.6 percent from 2009.

The shares have attempted to rally back after the declines, but now traders apparently think they will be unable to push through the 200-day moving average at $18.95.

Intuit, whose Quicken tax software has drawn customers from HRB, is up 18 percent so far this year and raised its guidance shortly before HRB cut its numbers.

(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: HRB , INTU

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