On the charts, the shares of Las Vegas Sands Corp. (NYSE: LVS, Stock Forum) have been on a hot streak during the past year, advancing more than 360% along support from their 10-week and 32-week moving averages. Furthermore, after outperforming the broader S&P 500 Index (SPX) by 30% during the past 40 sessions, the security recently scored a psychological victory, breaching resistance at the $20 level. This round-number neighborhood could now switch roles to act as an added layer of support.
However, despite the casino concern’s solid footing on the charts, the near-term options crowd has grown increasingly skeptical of LVS lately. Since early 2010, the equity's Schaeffer's put/call open interest ratio (SOIR) has slithered higher, indicating that short-term puts have been added at a faster pace than calls. In fact, the stock's SOIR of 0.94 stands only six percentage points shy of an annual pessimistic peak.
In the soon-to-expire April series of options, most bearish bettors have centered on the out-of-the-money 20 and 21 strikes, which are home to almost 30,000 puts combined. In the same vein, May-focused put players have honed in on the 19 and 20 strikes, which harbor almost 10,000 open puts combined. However, this notable accumulation of pessimistic positions could actually act as an added layer of options-related support for LVS in the near term.
What’s more, the skepticism levied against the outperformer could also be a boon for the stock, from a contrarian standpoint. Should LVS continue its quest for new highs, an unwinding of pessimism in the options pits could help the security extend its year-to-date advance.
Disclosure: Andrea Kramer has no financial interest in any of the equities or products mentioned in this column.