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Linn Energy LLC put volume ran at three times the average daily pace on Monday
It was a terrible start to the week for Linn Energy LLC (NASDAQ:LINE), which shed 18.2% on Monday, after MLV & Co. reiterated a tepid "hold" rating on the shares, explaining "LINE's distribution policy appears threatened if current commodity prices persist for a significant period." Against this backdrop, the stock was sent to the short-sale restricted list, and put volume soared to three times what's typically seen, as traders looked for alternate ways to bet bearishly on the equity.
Drilling down, LINE's December and January 2015 10-strike puts saw the most action, with 9,864 contracts collectively traded here. All signs point to buy-to-open activity, as traders rolled the dice on an extended stay in single-digit territory.
In today's session, the shares fell to a record low of $9.17 out of the gate -- but were last seen 10.7% higher at $10.88, as the company's fresh influx of cash overshadows another round of dreary analyst attention. Specifically, Baird cut its rating on the stock to "neutral" from "outperform," and slashed its price target to $10 from $21, while Raymond James dropped its target price by $15 to $18.
Given yesterday's sharp sell-off, though, LINE's 14-day Relative Strength Index (RSI) is resting at 16 -- deep in oversold territory -- suggesting a near-term bounce may have been in the cards. Should the stock resume its downtrend, though, more bearish brokerage notes could be on the horizon. At present, five out of eight covering analysts maintain a "buy" or better rating toward Linn Energy LLC (NASDAQ:LINE), versus three "holds" and not a single "sell."