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Bears want to trash Air Products

David Russell (david.russell@optionmonster.com)

Air Products & Chemicals has stalled at long-term resistance, and the bears want to knock it down a peg.

optionMONSTER's Depth Charge monitoring system detected the purchase of almost 2,300 July 95 calls, most of which priced for $2.05 to $2.40. Volume was almost 9 times the previous open interest at the strike, indicating that new positions were initiated.

Puts lock in the price where a stock can be sold, which makes them move inversely to the underlying shares. The unusual thing about today's contracts is that they're in the money , which gives them an especially strong bearish correlation to the provider of industrial gases. It also suggests they're being used as a substitute for shorting the stock. (See our Education section)

APD is down 2.38 percent to $93.15 in morning trading. Earlier this month it peaked around the same $97 level where it previously hit resistance in 2011. That could be leading some chart watchers to think that it's due for a pullback.

The tone has also been less enthusiastic in recent quarterly reports, with management trimming guidance and revenue often missing forecasts. The next set of numbers will be released on July 23.

Overall option volume is 5 times greater than average in the name so far today, with puts accounting for more than four-fifths of the total.

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