Option Skews - Relatively Heavy Put Activity on Monsanto Co, Chesapeake Energy Corp, Broadcom Corp, Chipotle Mexican Grill 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), Union Pacific Corp (UNP), Priceline.com Inc (PCLN), Lifeline Systems (LIFE), Monsanto Co (MON), Chesapeake Energy Corp (CHK), Broadcom Corp (BRCM), American Eagle Outfitters (AEO), Chipotle Mexican Grill Inc (CMG), Cummins (CMI), Jones Apparel Group (JNY), CIENA Corp. (CIEN), Hewlett-Packard (HPQ), Nabors Industries (NBR), Dow Chemical (DOW), Amphenol (APH), Regions Financial Corp (RF), Principal Financial Group Inc (PFG).

Regular readers might notice that today's table shows relatively light activity. The buy-to-open put volume on the ISE was on the smaller side and fewer stocks met my scan criteria. However, there are a few interesting situations. Monsanto Co, Chesapeake Energy Corp, Broadcom Corp, and Chipotle Mexican Grill Inc are the charts that stood out to me -

• I looked at Monsanto back in June and noted the following -
  "Near the end of last year, the shares put in a bottom near 65 and were steadily grinding higher until they pushed into resistance near 93. The area between that the resistance and the trendline has been steadily compressing and something has to give here. How the equity breaks here will be a good clue to the underlying supply/demand picture."
  The current weekly chart shows the stock broke the uptrend and is now testing the lower end of support. In a situation like this, I would not view the put activity as counter-trend sentiment. The stock has struggled and is on the threshold of a significant breakdown.
• Last week we saw that Chesapeake Energy was pulling back to retest former resistance as support. The updated daily chart shows the shares appear to be trying to stabilize, though they have yet to break the recent downtrend.
• The daily chart of Broadcom shows the equity has broken the uptrend discussed a month ago. The first break of a sharp uptrend is a good event to watch. While it can signal an abrupt reversal, many times it is the beginning of a consolidation phase. It looks as if the shares are trying to stabilize here amid the short-term oversold condition. I would expect to see a small bounce, which would set the recent low as the key level to watch. Holding above that low would signal a consolidation while a break would be worrisome.
• I recently looked at Chipotle Mexican Grill ahead of earnings and discussed the ideal breakout scenario. The updated weekly chart shows that didn't happen. However, the stock remains above support so I would call this more of a holding pattern at this point.

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