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Shares of Mylan Labs (MYL – 25-11/16) have started to cascade noticeably lower this morning after opening down 3/16 from Friday's close. Around 11:30 a.m., the stock was posting a 6.4-percent loss.
Shortly after the open today, it was reported that the company's Chief Financial Officer had resigned, but was apparently rapidly replaced. The change puts in place an unknown variable in the company's fundamental equation and investors are sorting out the facts.
Ever since early August, the equity has been range bound between the 24 and 30 levels. Today's trek lower has taken the equity near the bottom of this range.
Schaeffer's Daily Sentiment, the Schaeffer's put/call open interest ratio (SOIR) for MYL had been trending downward (toward more optimistic levels) since early September, despite the shares' sideways movement. Currently, peak front month open interest lies in the December 25 call option with 5,046 positions. This represents an increase of 1,210 positions over Friday's open-interest number. This continued optimistic positioning from the speculative crowd is discouraging for MYL's short-term outlook, in our contrarian view.