PetMed Express Getting Bitten
by Houghton and Atkeson 11/20/08
Amazingly enough, some stocks are trading well above their 200-day moving averages. One in particular is PetMed Express (PETS), which is up almost 50% year-to-date.
More Trader Alerts
The company is a pet pharmacy that issues medications for dogs, cats and horses. Many of the product sold are non-prescribed drugs including itch relief, Omega 3, fly control and hairball remedies. Earnings have been good and the company has been repurchasing stock.
On the other hand, it appears the CFO has been selling some of his shares lately.
Today, with PETS trading at about $18, we are seeing substantial put buying on the Dec 20 Puts (TRQXD). So far, 2,000 contracts have been executed, which represents 10-times normal volume.
Options traders today seem to be telling us that no sector of the economy is immune from this downturn.
More By This Expert
Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
Watching the Treasury's Actions
In the short-term, the government's bond auction is likely to be a key driver of stocks.
Treasury Auction Boosts Market
The Treasury's auction of two-year notes brought an upside surprise which should alleviate fears of a lack of demand for U.S. paper.
Credit Markets Point to Upturn
The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
- What's Hot: DELL, DHI November 20, 2009
- Sidewinder: MCD, DKS, JPM November 20, 2009
- Options News: SII November 20, 2009
- Sidewinder: CY, ADSK, KG November 19, 2009
- Options for Dummies November 19, 2009
Options Broker Center
