Schaeffer's Option Activity Watch June 21, 2004 11:25 AM US Eastern Timezone
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According to Yahoo!Finance SanDisk (Nasdaq:SNDK) designs, develops, manufactures and markets flash storage card products used in a variety of electronic systems. The stock has run into trouble of late, shedding more than 53 percent since setting a multi-year high in November. During this time frame, SNDK has met with staunch resistance at its descending 10-week and 20-week moving averages. The security has also underperformed its peers in the Nasdaq Composite, as its relative-strength measure has been in decline mode since early November. Offering up a hint of hope for the shares is the round-number 20 level, which appears to have buoyed the shares for the past week.
Despite the stock's failing technical performance, investors continue to remain optimistic toward the shares. Despite Friday's accumulation of more than 8,000 put contracts at SNDK's July 22.50 strike, the stock's SOIR continues to slip lower, coming to rest at 0.84. This reading is below 42 percent of all others taken in the past year. What's more, Wall Street continues to favor the security. According to Zacks, there are eight "buy" or better ratings and two "holds," with no "sells." This vote of confidence amid a decline in the share price could spell further downside for the stock.
Short sellers, on the other hand, aren't buying the bullish song and dance, as short interest increased by six percent over the past month. While the resulting 27.1 million shares sold short could be covered in a relatively unimpressive 3.58 days, this bearish accumulation of bets represents a hefty 17.39 percent of the stock's total float. This smidgen a pessimistic sentiment may not be enough to lift the shares, however. If support at the 20 level does not hold, potential analyst downgrades could send SNDK spiraling lower.
Click the following link to see the Weekly Chart of SNDK since September 2001 with 10-Week and 20-Week Moving Averages: schaeffersresearch.com .
Steve |
