Lululemon Athletic is hitting resistance at a key level, and the
bears are looking for a quick selloff.
optionMONSTER's Depth Charge monitoring program detected the
purchase of some 5,500 Weekly 68.50 puts expiring this Friday for
an average premium of $2.53. A similar number of the Weekly 64 puts
was sold at the same time for $0.69, resulting in a net cost of
$1.84. Volume was more than 12 times open interest at each strike,
indicating that a new
The position will expand to $4.50 if the yoga-apparel retailer
closes at $64 or lower on expiration three days from now--implying
profit of 145 percent move from the shares declining less than 7
percent. (See our
section for more on the potential leverage of options.)
LULU is down 1.06 percent to $68.39 in midday trading. It's been
trading in a range for almost two years but now seems to be
consolidating below its 200-day moving average. That could make
some chart watchers think that it's ready to start trending lower.
Guidance was below consensus the last time results came out on
Sept. 12, causing the shares to gap lower.
Total option volume in LULU is almost triple the daily average so
far, according to the Depth Charge. Overall puts outnumber calls by
more than 3 to 1.
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