Dynegy is showing bearish signs, and traders are looking for
optionMONSTER's Depth Charge monitoring program detected the
purchase of more than 1,300 December 6 puts for $1.55 and 2,000
December 5 puts, most of which priced for $0.88 to $0.90. Volume
was above open interest in both strikes.
DYN slipped 1.46 percent to $4.73 yesterday, but at one point in
the session it was up more than 6 percent. The
electricity-generation stock has been trending lower for more than
more than two years despite upside in the broader market.
It's been wrangling with a giant debt load and is tied up in a
legal fight with bondholders over its attempt to restructure
obligations without a Chapter 11 bankruptcy filing. It made a lower
high earlier in the month when it slammed into resistance at its
200-day moving average, and seems to be tracking its 50-day moving
average to the downside.
Some chart watchers may consider that evidence of a bearish trend,
which would explain yesterday's activity.
Overall option volume was 41 times greater than average, with puts
outnumbering calls by 17 to 1.