Manitowoc has been drifting lower since the spring, and one trader is looking for more downside.
optionMONSTER's Depth Charge tracking system detected the purchase of 2,905 November 12 puts, most of which priced for $1.20, against open interest of just 342 contracts. The trade pushed total options volume in the capital-goods stock to more than twice the daily average.
MTW fell 1.59 percent to $11.13 in morning trading and has lost more than a quarter of its value in the last six months, while the S&P 500 has recovered most of its lost ground. The company, best known for making construction cranes, popped higher on Sept. 30 after announcing plans to refinance its heavy debt load.
Since then, however, it seems to have been hitting resistance around its 200-day moving average (purple line on chart) and has been pushing lower since failing to hold a five-month high of $12.78 on Oct. 8.
The next earnings release is scheduled for a week from today. The last report in late July was better than expected, fueled by food-service sales.
The fact that today's trade used in-the-money contracts indicates that the investor sees only modest potential downside for MTW because the puts bought will be more sensitive to small movements in the stock price than out-of-the-money options.
(Chart courtesy of tradeMONSTER)
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