The Estee Lauder Companies Inc. (EL) Bears Emerge Amid All-Time High

Estee Lauder Companies Inc (EL) bears are betting on a quick turnaround

May 5, 2015 at 11:14 AM
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Estee Lauder Companies Inc (NYSE:EL) is 6.2% higher today at $88.73 -- and earlier touched a record high of $89.84 -- after the company posted strong fiscal third-quarter numbers. Now, options volume is through the roof, with contracts crossing at 17 times the expected intraday amount. One of the most popular strikes today is the May 87.50 put, which it appears is being bought to open. These traders expect EL to fall back below $87.50 by the close on Friday, May 15, when front-month options expire.

Ahead of earnings, calls were popular. In fact, the security's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.01 ranks higher than 92% of all readings from the past 12 months. In other words, call buying has been much more popular than usual, relative to put buying, during the past 10 weeks.

Looking to the brokerage bunch, most have taken a bullish stance toward EL. Specifically, 13 of 17 brokerage firms have "buy" or better ratings on the stock, compared to four "holds" and not a single "sell." However, with today's gains, the shares are knocking on the door of their average 12-month price target of $90.28, meaning future price-target hikes could be in the cards.

Before today's breakout, Estee Lauder Companies Inc (NYSE:EL) had been quiet on the charts for some time. Since early February, the equity churned between $80-$85, before this morning's bull gap.

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