National Semiconductor has rallied to a level that was
resistance earlier this year, and the bears are coming out.
optionMONSTER's Depth Charge tracking system detected the purchase
of more than 4,000 December 14 puts, most of which priced for $0.18
to $0.20, against open interest of 368 contracts. Overall option
volume in the name is 7 times greater than average so far in the
NSM is up 0.33 percent to $14.75 in early afternoon trading. It
gapped higher at the open but drifted lower after testing $14.91,
its highest price since June. That level also corresponds to
various peaks over the last 18 months, which may be leading some
chart watchers to expect a reversal.
The stock has been rallying along with other chipmakers, but
investors may now be worried about its next earnings report on
Thursday--especially if they recall the last release on Sept. 9,
when management warned of slowing growth and issued weak revenue
guidance. NSM gapped lower on that news and has been battling its
way higher since.
In another noteworthy trade, about 1,380 January 15 calls were sold
for $0.45 to $0.55. Volume was slightly above open interest, so the
activity may have resulted from a trader exiting a long position or
predicting a top in the share price. Like the put buying, the call
selling reveals a generally negative outlook for the stock. (See
our Education section)
(Chart courtesy of tradeMONSTER)
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