Also noted, Citigroup analyst reduced his price target from $50 to $35 due to his estimate of a $2.9 Billion asset related write down in the 3rd quarter.
It looks like volatility is moving higher along with lows in the put/call volume chart not seen since October 2007. The put/call volume ratio is sitting at about 1.20 and it looks like it was at parity a couple days ago. There seems to be a tug of war in sentiment and the rope doesn't seem to be moving in either direction. One side will give when the news catalyst comes out of either a buy out, sale of assets or none of the above. From a brief look at the call/put open interest chart on schaeffersresearch.com, it appears that there is a large amount of Put open interest at the SEP $5, $10, and $13 strike, with about 32,000 puts open at the $10 strike far outpacing calls. The OCT $30 call contract has the most open interest with over 24,000 contracts.
Now about the short interest, as of 8/1 about 82 million shares are reported short, and from the look of the chart it's at all time highs, so either we're in for a huge move to the downside or a massive rally is about to occur if the shorts get squeezed.
Technical Chart Analysis (chart at top of page): It looks like LEH has been gathering some strength from the RSI, also volume has increased to the 100 Million share level. It broke a key $15 level, however it closed on strong volume ending at $14.41. If we do see a positive catalyst and it breaks above the $15 mark again we could see $17.50 or $20.00 where the top of downward trend channel exists along with the 50 day moving average, if $15 fails, down we go.
