Put Option Activity in ZION and XHB, Plus $LUMBER Contract (Charts)

Today had interesting option activity in ZION (Zion Bancorp) and XHB (Homebuilders ETF). First here are articles for more detail:

Unusual Options Activity: S, OMX, ZION, STI, PALM, AIG, NVDA & PEP (TheOptionInsider)
Thursday Options Update: S, ZION, GDX, PBR, BSX, AIG & PEP (Andrew Wilkinson)
Large put buying in homebuilder ETF (OptionMONSTER)

The activity that stuck out was the 12,500 put spread on the April $17-$13 puts. Also around 5,000 traded on both the March $20 call and $17 March put which was interesting. Regarding XHB, 6,500 traded on both the June $16 puts and calls and 10,695 June $14 puts traded (w/6,439 open). Again, read the articles for better analysis on the trades.  ZION closed at $18.17 and XHB, $15.76.

So here are the charts. First, ZION tested $20 for the 3rd time in what looks like an ascending triangle from April.  If weakness prevails here it could fall to trend line support and the 200dma, but above $20 resistance looks like a decent hedged long.  Does Zion Bancorp have viral CRE exposure?

ZION Chart Courtesy of Stockcharts.com

The XHB chart looks like an ascending triangle as well.  A long would be above previous resistance at $16.20.  You can see the tight inflection point coming.  XHB has been trading at the same level for 6 months now so wait for something to happen imho.  XHB closed at $15.76.  The 200dma is at $14.26.  There are a lot of people bearish on housing given the overhang of inventory, foreclosures and people don't have jobs or access to credit.  Also, the Option ARM reset wave is hitting this year.  I'll find a chart and post it, or Google Whitney Tilson housing report.  Also what is up with the lumber contract?  It is testing 2007 and 2008 highs.  I guess watch all housing data (inventory, sales figures, home prices, lumber).




XHB and $LUMBER (Random Length) Courtesy of Stockcharts.com

Also if interested, I just did a post on Chicago housing, including the S&P/Case Shiller Chicago Index, a video from Crain's Chicago giving analysis and foreclosure data.  Analysts don't expect a real recovery until 2013.  I embedded the video.

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