The Level Options Traders are Watching After Allergan plc Ordinary Shares (AGN) Earnings Miss

Drugmaker Allergan plc Ordinary Shares (NYSE:AGN) is getting punished on the charts after reporting quarterly earnings and revenue that fell short of expectations and lowering its full-year forecast. An expanded share repurchase program and new quarterly dividend didn't save the stock, either, as the shares are sliding 4.3% to $199.78 -- not far off their May annual low of $195.50, and on pace to close below the $200 level for the first time in more than two years. Options traders have wasted little time chiming in today, with total AGN options flying off the shelves at six times the usual intraday pace.

Diving right in, call options have the lead over put options in AGN's options pits, but that doesn't mean everyone is betting on a bounce. The most active option so far is the far-out-of-the-money January 2017 280-strike call. By the looks of things, however, a large portion of the volume at this strike is coming from traders closing existing positions. Further down, some possible buy-to-open action has been spotted at the weekly 11/4 200-strike put. If this is the case, put buyers are betting on AGN continuing its slide -- and remaining below the key $200 level -- through the week's end, when the series expires.

Put buying is nothing new among AGN options traders, however. In fact, over the past 10 days on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has seen 1.17 puts purchased for each call. This put/call volume ratio rests in the 89th percentile of its annual range.

Outside of the options arena, AGN has seen a rise in short interest of late. These bearish bets, though accounting for just 2.9% of the equity's total float, rose by nearly 28% over the two most recent reporting periods. Moreover, short interest now sits at its highest level since Sept. 2003.

Meanwhile, the brokerage bunch is sitting on surprisingly optimistic positions. At the moment, 80% of the firms covering AGN rate it a "buy" or better, and not one has given the stock a "sell" rating. What's more, than average 12-month price target sits at $294.83 -- representing a whopping 48% premium over the security's current levels. Should analysts begin to lower their expectations, it could create major headwinds for the shares.

It's been a tough year for Allergan plc Ordinary Shares (NYSE:AGN) so far, with the stock shedding 36% of its value. Still, even if the shares do fail to regain $200 before the close, they could find support just underfoot at the $197 level, which roughly represents a 50% Fibonacci retracement of the stocks rally from its 2012 lows to its 2015 highs. Plus, with a 14-day Relative Strength Index (RSI) of 21, the stock is deep into oversold territory, and could be due for a bounce.