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Bearish position in Johnson Controls

Posted
4/3/2013 12:25:00 PM
By: optionMONSTER
Referenced Stocks:JCI

Johnson Controls is parked at resistance, and the bears want to drive the stock lower.

optionMONSTER's Depth Charge monitoring system detected the purchase of almost 4,900 July 30 puts, most of which priced for $0.50. Volume was more than quadruple the open interest at the strike, indicating that new positions were implemented.

The investor now has the right to sell JCI shares for $30 over the next 3-1/2 months, no matter how low they may fall. He or she may be using the contracts to hedge a long position in the company, which supplies heating and cooling equipment, or to bet on a drop. (See our Education section)

JCI is down 0.86 percent to $33.92 in early afternoon trading but has appreciated 23 percent in the last six months. The stock is now back near the level where it peaked early last year, which could be leading some chart watchers to believe that it's due for a pullback.

The company doesn't appear to have announced when second-quarter results will be released, but last year it occurred on April 20.

Total option volume is almost twice the daily average so far today, according to Depth Charge, with puts outnumbering calls by 10 to 1.