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April 26, 2013  Fri 4:14 AM CT

CJES: SEE CHART GET CHAIN FIND STRATEGIES
C&J Energy Services has been having a bad month, and the bears are still running the show.

optionMONSTER's Depth Charge monitoring system detected the purchase of some 4,900 May 18 puts in volume that dwarfed the strike's previous open interest of just 77 contracts. Premiums climbed from $0.25 to $0.35 as the trades crossed and the stock pushed lower.

Puts lock in the price where investors can sell shares in the energy-fracking company. These contracts will appreciate if the stock continues to decline, so the buyer may be using them to speculate on further downside or to hedge a long position.

CJES fell 1.64 percent to $19.23. It has declined 15 percent since the start of April, when the company warned that weak customer demand forced it to seek business in the highly competitive spot market.

Since then competitor RPC reported weak earnings and revenue, admitting "most of the contractual arrangements in our pressure-pumping service line expired during 2012, and we now operate the majority of our fleets in the spot market." (See researchLAB's dedicated Fracking page for more.)

C&J Energy reports complete first-quarter results on Wednesday, so yesterday's put buyer probably expects similarly poor statement.

Total option volume in the name was more than 19 times greater than average in the session, according to the Depth Charge.
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Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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