Bulls Have High Hopes for Coeur d'Alene Mines Corporation Ahead...

Bulls Have High Hopes for Coeur d'Alene Mines Corporation Ahead of Earnings

5/6/2009 2:28 PM
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Keywords: CDE


As the company's first-quarter earnings report approaches, call volume is accelerating on Coeur d'Alene Mines Corporation (CDE). During the past five days, traders on the International Securities Exchange (ISE) have bought to open 4,742 calls, compared to a mere 10 puts.

This preference for bullish bets is highlighted by the equity's comically skewed 10-day ISE call/put volume ratio of 329.11, in the 86th annual percentile. And, just in case there were any doubt as to option players' feelings toward CDE, the stock's Schaeffer's put/call open interest ratio (SOIR) arrived today at a nearly imperceptible 0.01.

Of course, the degree of optimism among option players is likely exaggerated by CDE's current share price of about $1.56. With 2.50 being the lowest optionable strike, there simply aren't many viable opportunities to bet on additional downside.

However, the stock does deserve a little credit for its recent rally. From its 2009 low of 55 cents per share, set on March 10, CDE has gained 195% along newfound support from its 10-day and 20-day moving averages. In fact, the equity closed the month of April atop resistance from its 10-month moving average for the first time since February 2008.

If the mining issue exceeds analysts' first-quarter earnings expectations, following the pattern set by its previous two reports, CDE could attract even more bulls to its bandwagon. The company's earnings report is due to hit the Street before the market opens on Monday, May 11, with analysts looking for a profit of less than 1 penny per share.