Brocade Communications (BRCD)

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BRCD Bullish Sentiment out there?

20 Beaten Up Stocks With Bullish Options Sentiment


1 comment | by: Kapitall December 14, 2010 | about: ALTH / BBVA / BRCD / CTIC / CYOU / EJ / GERN / GFA / HIW / LRY / OFC / RAD / REV / RMBS / RSH / SUPX / SWY / TIVO / TKLC



The following is a list of underperforming stocks that options traders expect to rebound over the coming weeks. To create this list, we started with the following screen:

* Market cap > $300M
* Down over the last year
* Price below SMA20, SMA50 and SMA200

That screen resulted in a universe of about 140 stocks. We then checked the call and put open interest for each of these stocks, and sorted the list by the Put/Call ratios.

All of the stocks mentioned here have the lowest Put/Call ratios, i.e. the largest number of open call option contracts relative to put option contracts (bullish options market sentiment).

Options traders seem to think there's a possibility of a rebound in some of these names. What do you think?

We last wrote about this screen on October 19, 2010. On that day, the screen produced 20 companies. Since then, 13 out of 20 companies mentioned in that article have outperformed the S&P 500 index (a success rate of 65.00%). The screen averaged a return of 11.01% vs. an index return of 6.4%. Click here to access a full breakdown of the screen's past performance.

Moving average data sourced from Finviz, options data sourced from Schaeffer's.

Interactive Chart: Press Play to visualize changes in market cap and analyst ratings for the top five stocks mentioned below. Analyst ratings sourced from Zacks. Note: The numbers on top of items represent the forward P/E ratio.