Option Skews - Relatively Heavy Put Activity on Potash Corp. of Saskatchewan, Dr. Reddy's Laboratories Ltd, PNC Financial Services

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: SPDR Trust Series I (SPY), PowerShares QQQ Trust (QQQQ), Potash Corp. of Saskatchewan (POT), Dr. Reddy's Laboratories (RDY), The DirectTV Group Inc (DTV), American Express (AXP), Carnival (CCL), United Technologies (UTX), BJ's Wholesale Club (BJ), Capital One Financial (COF), Advanced Micro Devices Inc (AMD), AMR Corp. (AMR), Zions Bancorporation (ZION), Praxair (PX), XTO Energy (XTO), Dow Chemical (DOW), PNC Financial Services (PNC), Intuit (INTU), Mylan Laboratories (MYL), Deere & Co (DE), Walt Disney (DIS), Hewlett-Packard (HPQ), Kansas City Southern (KSU), Chubb Corp. (CB).

Regular readers might notice that today's table shows relatively light activity. Outside of the S&P 500 SPDR (SPY) and PowerShares QQQ Trust (QQQQ) the buy-to-open put volume on the ISE was on the smaller side and fewer stocks met my scan criteria. With that in mind, Potash Corp. of Saskatchewan, Dr. Reddy's Laboratories Ltd, and PNC Financial Services are the charts that stood out to me -

• It has been over a month since I checked in on Potash Corp. of Saskatchewan. My last comments noted a price compression. The updated weekly chart, however, shows the pattern of higher lows has stalled out. The shares have flat lined for two months now which wipes out my comments about near-term momentum. The daily chart highlights the recent action and levels to watch.
• Shares of Dr. Reddy's Laboratories have nearly doubled so far this year. The daily chart shows the recent break out of congestion. The equity turned lower yesterday setting up the possibility of a retest of this former resistance as support.
• The weekly chart of PNC Financial Services shows the stock is back to challenge resistance. The shares were rejected at this zone back in May but have now clawed their way back to it. I point this out because a breakout has the potential to catch the Street off guard as only 3 of 16 analysts rank the stock with a buy rating.

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