Option Skews - Relatively Heavy Put Activity on UnitedHealth Group Inc, Whole Foods Market Inc, Amedisys Inc, Trina Solar Limited

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), Continental Airlines (CAL), DIAMONDS Trust Series I (DIA), KB HOME (KBH), Goldcorp Incorporated (GG), Halliburton (HAL), Aetna (AET), UnitedHealth Group Inc (UNH), Broadcom (BRCM), MBIA Inc (MBI), Moody's Corp. (MCO), Whole Foods Market Inc (WFMI), Federal Realty Investment Trust (FRT), ChevronTexaco (CVX), Amedisys Inc (AMED), ONYX Pharmaceuticals (ONXX), The Bank of New York Mellon Corp (BK), Hovnanian Enterprises (HOV), Pioneer Natural Resources (PXD), Bunge Limited (BG), Sysco Corp. (SYY), Walter Industries (WLT), Trina Solar Limited (TSL), Black & Decker (BDK), Joy Global (JOYG).

UnitedHealth Group Inc, Whole Foods Market Inc, Amedisys Inc, and Trina Solar Limited are the charts that stood out to me -

• UnitedHealth Group is scheduled to release earnings tomorrow morning. A look to the weekly chart shows the stock is in need of a catalyst. Since hitting its lows last fall, the equity has been bouncing aimlessly in a very wide range.
• In contrast, shares of Whole Foods Market have moved in nearly straight-line fashion since November. The weekly chart shows the former downtrend has been broken and resistance has been penetrated. The stock is overbought but that has been the case for some time with no ill effects so far.
• The daily chart of Amedisys highlights the wild ride shareholders have been on recently. In the last few months alone, the stock rallied to 46, plunged to 30, then rallied back to 46. Earnings are scheduled to be out next Tuesday so the potential for even more volatility exists. In a situation like this where the stock has shown a capacity to gap, buying options may be useful as a way to control risk. Premiums will likely be bid up, but your risk is capped at your initial capital outlay.
• The weekly chart of Trina Solar is worth a look. The stock has overtaken resistance near 25 amid a steady uptrend.

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