Comcast's chart is setting up for a potential rally, and option
activity continues to reflect positive sentiment ahead of its
earnings report before the bell this morning.
Our tracking systems detected the sale of about 20,000 September 18
puts on the cable company's voting stock, which trade under the
ticker CMCSA. The transaction, which priced for $0.44, followed
bullish call buying in the non-voting CMCSK shares last week.
CMCSA fell 0.72 percent to $19.33 yesterday and is up 9 percent in
the last month. The stock has been making successively higher lows
since March 2009 and following its 200-day moving average higher
(red line on chart). It also seems to be finding support above its
50-day moving average, which some investors may consider evidence
of a bullish trend (blue line on chart).
Yesterday's put seller hopes that the stock will remain above $18
while time decay eats away the value of the contracts heading into
expiration on Aug. 20. The fact that CMCSA bounced above that level
last week may have made him or her think that other investors are
willing to buy the shares not far below their current price. (See
our Education section)
The trade seems to reflect an emerging positive tone in telecom and
cable stocks such as AT&T and Verizon. Our tracking systems
also detected bullish call buying in Cablevision last week.
Additionally, telecom-equipment name Tellabs reported strong
earnings and boosted its full-year guidance yesterday because
companies in the sector are building out networks.
Overall options volume in the name was more than four times the
daily average yesterday.
(Chart courtesy of tradeMONSTER)
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