Option Skews - Relatively Heavy Call Activity on Microsoft Corp, The Procter & Gamble Co, CME Group Inc

Here are the stocks that saw a bias toward call 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 call volume on the ISE is at least twice as great as the put volume. It then sorts the stocks based on the call volume. Since this is buy-to-open data, this can be a good source for finding stocks where optimism is emerging. Of particular interest to me would be situations where we see call activity on stocks that are still in intermediate-term downtrends. This would be a potentially cautionary sign from the contrarian perspective.

Companies included in today's scan results: Microsoft Corp (MSFT), Procter & Gamble (PG), JPMorgan Chase & Co (JPM), Bank of America Corp (BAC), CVS Corp. (CVS), Sears Holdings Corp (SHLD), Regions Financial Corp (RF), NVIDIA Corp. (NVDA), Baker Hughes Incorporated (BHI), CF Industries Holdings (CF), Rambus Inc (RMBS), Cisco Systems Inc (CSCO), Rockwell Automation Inc (ROK), Akamai Technologies (AKAM), Goldman Sachs Group (GS), Merck (MRK), Crocs, Inc. (CROX), CIGNA Corp. (CI), Staples (SPLS), Biogen Idec Inc (BIIB), Kraft Foods (KFT), Hecla Mining (HL), Clorox (CLX), CME Group Inc (CME), Activision Blizzard Inc (ATVI).

Microsoft Corp, The Procter & Gamble Co, and CME Group Inc are the charts that stood out to me -

• My last check of Microsoft was just ahead of earnings. The updated weekly chart shows the shares were able to overtake long-term resistance. However, the stock is overbought and has traded in a range since gapping higher after the report. As I have noted many times, an overbought condition can be worked off with a sideways consolidation so the stock may need to rest here.
• Procter & Gamble is another situation that was last discussed as earnings loomed. The weekly chart shows the stock is now pulling away from former resistance. It too is overbought but buyers have so far continued to chase the shares.
• The daily chart of CME Group shows the equity has pulled back after the breakout discussed last month. While the stock didn't hold above its September highs, there appears to be a pattern of ascending lows forming. In other words, it looks like we are starting to see some signs of life after the mid-year pullback. The June highs are the major overhead hurdle to keep in mind.

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