Option Skews - Relatively Heavy Put Activity on Amazon.com Inc and Johnson & Johnson

Here are the stocks that saw a bias toward put activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's put volume on the ISE is at least twice as great as the call volume. It then sorts the stocks based on the put volume. Since this is buy-to-open data, this can be a good source for finding stocks where skepticism is emerging. Of particular interest to me would be situations where we see put activity on stocks that are still in intermediate-term uptrends. This would be a potentially encouraging sign from the contrarian perspective.

Companies included in today's scan results: PowerShares QQQ Trust (QQQQ), ChevronTexaco (CVX), Magellan Health Services (MGLN), Amazon.com Inc (AMZN), Intuit (INTU), Express Scripts (ESRX), Aruba Networks, Inc. (ARUN), Warner Chilcott Limited (WCRX), Johnson & Johnson (JNJ), Molex Incorporated (MOLX), Toll Brothers (TOL), American Electric Power (AEP), Abbott Laboratories (ABT), Western Digital (WDC), Zions Bancorporation (ZION), Marathon Oil (MRO), Garmin (GRMN), Realty Income (O), McDonald's (MCD), AngloGold Ashanti. (AU), Autodesk (ADSK), MetLife (MET), Kohl's Corp. (KSS), Medicis Pharmaceutical (MRX), Vulcan Materials (VMC).

Amazon.com Inc and Johnson & Johnson are the charts that stood out to me -

• I last discussed Amazon.com ahead of earnings and said that a positive reaction could put the stock above resistance and leave the Street scrambling to catch up. The weekly chart shows that the stock powered through its previous highs with gusto. The equity is overbought but I would at pullbacks as potential long opportunities.
• Johnson & Johnson may be best known as the typical defense-type name with its staple of consumer products, but check out the weekly chart. The shares have put in a solid rally off their November lows and then moved to a tight consolidation phase. The stock is currently testing the upper edge of the recent congestion zone. A breakout would set the stage for a resumption of the uptrend so keep an eye on the chart.

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