Schaeffer's Trading Floor Blog

Highs & Lows: Taser International and Overseas Shipholding Group

TASR rallied to a new annual high today, while OSG fell to a 26-year low

by 11/22/2011 3:08 PM
Stocks quoted in this article:

It's been a back-and-forth day for the major equity indexes, but U.S. stocks have spent most of their time wallowing below the breakeven line. Accordingly, new annual lows are outnumbering new annual highs by a substantial margin. The NYSE reports 79 securities at fresh 52-week lows, compared to only 35 equities in annual-high territory. The picture is even gloomier over on the Nasdaq, where we've got 108 new lows and just nine annual highs. Among the handful of stocks rising to bullish technical milestones today is Taser International, Inc. (TASR - 6.00), while Overseas Shipholding Group Inc. (OSG - 10.49) has joined the bearish majority.

TASR price chartFirst up, TASR topped out today at $6.11, in territory not explored since March 2010. The stock has racked up a healthy year-to-date gain of about 25%, comfortably surpassing the broader equities market. The most recent leg of TASR's uptrend has been supported by its 10-day and 20-day moving averages -- not to mention a stronger-than-forecast earnings report in late October.

Despite the stock's quest for new highs, shorts remain skeptical of TASR's technical prowess. Currently, no less than 7.4% of the security's float is sold short. However, call volume today has surged to three times the norm, with 1,001 contracts changing hands so far. Traders appear to be buying calls at the overhead March 7.50 strike, suggesting that some shorts may be looking to hedge their bearish bets with out-of-the-money calls.

OSG price chartOn the bearish side of the coin, OSG backpedaled to a session nadir of $9.92 -- its lowest price since 1985 -- after sector peer Frontline (FRO) warned of major fundamental concerns in its latest earnings report. S&P Capital IQ weighed in this afternoon with an upgrade to "hold" from "strong sell," but OSG is still sitting on a loss of about 16.6% at last check. As a result, the stock seems destined for a daily breach of support at the $12 level.

Interestingly enough, OSG is also seeing an uptick in call activity today. More than 2,200 calls have traded so far, roughly doubling the stock's expected intraday volume. The December 12 strike is the center of attention, as 1,081 contracts have crossed the tape -- 85% at the bid price, suggesting they were sold. With open interest still outnumbering volume at this strike, it's unclear whether skeptics are selling new calls at this strike -- or whether disenchanted bulls are calling it quits while they still have a decent supply of time value remaining.

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