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