Is Noble's rally running on empty?

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Noble Energy has been rallying since late August, but traders are looking for a drop.

NBL optionMONSTER's Depth Charge tracking program detected the purchase of about 4,000 November 85 puts throughout yesterday's session against open interest of just 754 contracts. They priced for $1.75 shortly after the open, then fell to around $1.50 before climbing to $1.95 and $2 in the final minutes of trading.

NBL declined 0.88 percent to $84.47 yesterday but is up 22 percent in the last three months. The oil and natural-gas driller has been rallying along with other independent energy producers as investors speculate on potential takeover candidates. NBL traded up to $85.95 earlier this week, its highest price since July 2008.

The put buyers are now positioning for a push to the downside, looking for the stock to fall another 2-3 percent by the end of next week for their trades to turn a profit.

Overall option volume in NBL was 6 times greater than average, with puts accounting for a bearish 90 percent of the activity.

(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: NBL

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