Bears look for Cypress to drop further

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Cypress Semiconductor has double-topped at an all-time high, and the bears are looking for a deeper correction.

optionMONSTER's Depth Charge tracking system detected the purchase of about 10,000 June 21 puts for $0.20 against open interest of 5,951 contracts. About 4,200 July 22s were bought more than one hour later, fetching $1.10 to $1.25. The activity pushed total option volume in the name to almost 5 times greater than average.

CY is down 2.28 percent to $22.05 in morning trading but is up 18 percent so far this year. The company has enjoyed a wave of strong demand for its programmable chips, which are proliferating in consumer electronics and mobile devices.

The last earnings report on April 21 beat estimates, and guidance was better than expected. Nonetheless, CY rolled over just below $24 on May 31. That's the same level where it peaked in mid-February, which could lead some traders to believe that it's hit resistance for the time being and expect further profit-taking.

Puts outnumber calls in the stock by more than 13 to 1 so far today.




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: CY

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