Three Short-Interest Plays

Anadarko Petroleum (APC) looks ready to go. In a market with many stocks near all-time highs or overextended, here is one that has filled the gap but doesn't look like it has much in the way of resistance until it reaches the $88-$90 area. I'm long the March $82.50 calls, although I could see an argument for longer-dated options. I think this will move quickly if a breakout takes hold. A failed breakout could have APC retest $80; hence, my hesitation to sell puts or put spreads.

APC Source: StockCharts.com View Chart » View in New Window »

There are three big short-interest names tonight with charts coiled and ready to move. Walter Industries (WLT) will see if it can right the ship and get a quarter in play like Cliffs Natural Resources (CLF) did. Upside on the chart looks to be about $12.40 while $10 looks like solid support on the downside. WLT would have to report a quarter and guidance that's utterly atrocious to break below $10. Options are looking for a move to $12.10 or $10.29, so within the boundaries of the chart. For me, this usually means we'll see a move beyond the option price. The nearly 39% short interest would have me leaning higher if I were to play it....190 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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