Stocks quoted in this article:
Applied Materials (AMAT - 53-3/8) is trading over six-percent higher today, as it moves from its uptrending 20-day moving average.
I went back and checked the open interest configuration now compared to when the shares experienced a short-term peak at 98 in June of 2000. It appears option speculators are far less optimistic about the shares' short-term prospects now versus then, despite the fact that the stock is now trading above its 50-day moving average, while it was breaking below this trendline in late-June 2000.
For example, call open interest at the front-month July 110 strike in June of last year was 11,000 contracts. This strike was 12% out of the money, suggesting speculative activity. Now, with the shares trading at 53 and change, there are 11,000 calls at the front-month February strike, but note how these options are in-the-money and thus less speculative in nature.
What does this mean? From an intermediate-term perspective, the stock is in better technical condition with respect to its 50-day moving average, however expectations are a lot more tame than in mid-2000.