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December 4, 2012  Tue 2:45 AM CT

EWY: SEE CHART GET CHAIN FIND STRATEGIES
The iShares MSCI South Korea Fund has been bumping up against resistance, but yesterday's option activity was dominated by a downside trade.

A trader bought 6,000 December 54 puts for the ask price of $0.09, according to optionMONSTER's Depth Charge system. The previous open interest at the strike was just 81 contracts, so this is clearly a new position.

The EWY was barely higher at the end of the day, closing at $59.65. The exchange-traded fund rose above $60 during the session, its highest level since early October and at resistance going back to its 52-week high of $61.57 on April 4. Shares were down at support at $56 two weeks ago.

Yesterday's long puts were not tied to any stock trades identified by our systems, so they could be an outright bearish play looking for the EWY to drop to prices last seen in July. This could also be hedging against a long position established at an earlier time. (See our Education section)
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Timing the Trade

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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