TriQuint Semiconductor has returned to a long-term resistance
level, and traders apparently think that a top is in.
optionMONSTER's tracking systems detected the sale of 2,556 January
14 calls, mostly for $0.20 to $0.30, against open interest of 1,516
contracts. Overall option volume in the chipmaker is 15 times
greater than average.
TQNT is down 1.44 percent to $13.72 in afternoon trading but
earlier in the session made a nine-year high of $14.03. The stock
has rallied 51 percent in the last three months amid frequent call
buying as investors priced in strong demand for its semiconductors
from the smartphone industry. Its last earnings report on Oct. 27
was better than expected, and management issued bullish guidance.
The shares have now returned to about the same level were they
formed a double bottom in 2001, before subsequently collapsing with
the rest of the tech sector later that year. Traders often look for
such key levels to take profits, causing old support to become new
Call selling is consistent with such a trend. The trading reflects
a similar cooling of enthusiasm in the semiconductor industry as
Bryan observed this morning. Other trades in late 2010 also showed
that the bullishness was moving to the software sector and away
(Chart courtesy of tradeMONSTER)
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