Markets

Bears look to devour Vulcan Materials

Vulcan Materials has been in a downtrend for years, and now the bears are looking for the ground to give way.

optionMONSTER's Depth Charge monitoring system detected the purchase of more than 5,000 November 25 puts against open interest of just 211 contracts. They initially priced for $0.95, and premiums quickly rose to $1 as the trades crossed.

VMC fell 2.76 percent to $29.92 yesterday and has lost more than 30 percent of its value in the last six months. The provider of materials such as crushed stone and sand has struggled amid a slowdown in both housing and government spending on projects such as highways. It has a heavy debt load, and short sellers have been steadily riding it to the downside.

The shares have been finding resistance at key moving averages and appear to be breaking out of bearish " flag " that took shape since August. Some chart watchers may now expect the downtrend to accelerate. If long-term support at $29 is broken, the next level is somewhere around $22.

Thanks to its junk credit rating and weak business outlook, VMC the kind of stock that bears often target when the economy slows.

Overall option volume was 7 times greater than average in the session, with puts outnumbering calls by 22 to 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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