Option Skews - Relatively Heavy Put Activity on Caterpillar Inc, NVIDIA Corp, Biogen Idec Inc

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), Ford Motor Co (F), Palm Inc (PALM), DIAMONDS Trust Series I (DIA), SanDisk Corp. (SNDK), Caterpillar Inc (CAT), ChevronTexaco (CVX), MGM Mirage (MGM), Silver Wheaton Corp (SLW), Corinthian Colleges (COCO), Petroleo Brasileiro SA (PBR), Incyte Corp. (INCY), Sunoco (SUN), Dick's Sporting Goods Inc (DKS), Toll Brothers (TOL), Whole Foods Market (WFMI), NVIDIA Corp. (NVDA), AMR Corp. (AMR), Cognizant Technology Solutions (CTSH), Barnes & Noble (BKS), Clean Energy Fuels Corp. (CLNE), Hologic (HOLX), Biogen Idec Inc (BIIB), Baker Hughes Incorporated (BHI).

Caterpillar Inc, NVIDIA Corp, and Biogen Idec Inc are the charts that stood out to me -

• I last looked at Caterpillar in August and said that a successful breakout would be a constructive step for the longer-term picture. The weekly chart shows the shares pushed through resistance and have trended higher. The stock is overbought but that has been the case for over 3 months now and so far made little difference.
• I checked in on NVIDIA earlier this month and noted that the shares were trying to break a short-term downtrend. The updated daily chart shows the equity did break the downtrend but is now pulling back toward support. Obviously, the most constructive scenario would be for the stock to remain above 12.
• I haven't discussed the chart of Biogen Idec in over a year. Up until that post, I had been offering upbeat comments but then the stock was hit with a brutal gap. The reversal left me saying that the technical picture had deteriorated to the point that I didn't believe that the skepticism could be consider "counter trend" to the price action. A look to the weekly chart shows the stock is within just a few points of where it stood 15 months ago. The chart also shows a clearly defined (albeit wide) range. After an ugly drop, it often takes months or even years for the recovery process to play out. On the bright side, the equity has stabilized. However, I would need to see the shares overtake resistance to begin to get interested in the longer-term trend.

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