There is some really bullish call volume for January. This both excites me and scares me. I am a strong believer in Max Pain theory so seeing all these calls worries me a lot plus the TA of the daily also has me a little concerned but at the same time the huge increase in open interest occurred on Friday as the stock had already begun tanking. Maybe someone knows something we don't and was trying to get some calls cheap? Who knows? Anyone have any thoughts on this? I am just looking for some food for thought.
If you look at the techs alu is beginning to enter heavily-over-sold conditions. This stk can turn on a dime, much as nokia did about a week ago as it dropped from 8.18 down to around 7.30 or so and then rebounded sharply. We can still go lower maybe test the 4.20 area but we can also begin to go up from here and I believe that we are due for a very sharp-turn-around and option traders are pretty sharp, so if they bought fri to me tihs indicates that we are very near a new bull-run!!
I want to agree with you I just have some concerns. I noticed the technical downturn when it failed to hold over 4.60 on the CITI upgrade and I also notice that if it doesn't hold this level then we have a slight support at 4.20 but if that fails were going right to 4. Usually when the bashers come in like rodgerdodger that is a good sign that we are about to reverse trend so I hope you are right but who knows, only time will tell.
Options can be deceiving because traders can sometimes make you think that heavy call volume will translate into higher stock prices. Sometimes it's a hedge against a short position. I'm thinking the buyer of the calls expects this "fading" to end my January and head higher. I certainly wouldn't want to short this going into ALU's best quarter of the year but the recent price of the stock may have good news baked in already. I'm down 4k currently but made close to 38k on this this year. Just hold and you'll be ok.