Option Skews - Relatively Heavy Call Activity on Citigroup Inc and General Electric Co

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: Citigroup Inc (C), Apple Inc (AAPL), Ford Motor Co (F), Bank of America Corp (BAC), Cephalon (CEPH), General Electric Co (GE), RRI Energy Inc (RRI), Pfizer (PFE), MBIA Inc (MBI), Wal-Mart Stores Inc (WMT), Sears Holdings Corp (SHLD), Las Vegas Sands Corp (LVS), CVS Corp. (CVS), Rambus Inc (RMBS), Goldman Sachs Group (GS), Cemex SAB de CV (CX), Goldcorp Incorporated (GG), Electronic Arts Inc (ERTS), Nokia Corp. (NOK), Radioshack (RSH), DryShips Inc. (DRYS), Yahoo! Inc (YHOO), Newmont Mining (NEM), Applied Materials (AMAT), American International Group Inc (AIG).

Citigroup Inc and General Electric Co are the situations that stood out to me as both were discussed recently.

• Last week's look at Citigroup showed the stock had broken support and hit a short-term oversold condition. The updated daily chart shows the shares have now rebounded to retest former support as resistance. This is a critical technical test as a rejection here would suggest buyers are walking away.
• I touched on General Electric two weeks ago and said the following -
  "It is crunch time for General Electric. Last week we saw the stock was selling off after earnings. The dip was pushing the equity toward oversold readings and I said this created a situation where I would expect buyers to step in. I left that post noting that a failure to stabilize would be a big warning sign that sideline money has been depleted. This daily chart highlights the near-term action. The 9-day Relative Strength Index (RSI) is now firmly in oversold territory and the stock is the middle of support."
  The current daily chart shows the warning sign has been put on hold. The equity dipped to the lower end of the support zone and then rallied. The stock did violate a trendline that connected the recent lows but the overall pattern of higher lows still seems to be in place. As it stands now, it appears that buyers are still willing to come in and support General Electric.

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