Sarah Wasserman (swasserman@sir-inc.com) On Tuesday, Barnes & Noble, Inc. (BKS) unveiled the new version of its Nook e-reader. The new device sports a color, 7-inch touch screen and Internet capabilities, and will be available on Nov. 19 for $249. The new and improved Nook is BKS' latest effort to set itself apart from Amazon.com, Inc.'s (AMZN) best-selling Kindle.
Technically speaking, BKS has been struggling lately, with the shares range-bound in the $15 to $17 region since August. During this time, BKS' 32-week trendline, which is located just above $17, has reinforced the upper rail of this range. Meanwhile, for the past few weeks, BKS has been testing support at $15, and is now hovering just below this level, around $14.95.
Option players have adopted a bearish attitude toward the struggling stock, as evidenced by BKS' Schaeffer's put/call open interest ratio (SOIR) of 0.92, which ranks in the 77th annual percentile. In other words, near-term traders have been more skeptical of the shares just 23% of the time during the past 12 months.
Turning to BKS' November open interest configuration, we find that peak put open interest resides at the in-the-money 17 strike. Meanwhile, the 17 strike also houses peak call open interest, with another substantial accumulation of calls at the 16 strike. Given BKS' lackluster technical performance of late, both 16- and 17-strike calls are out of the money. As November expiration draws closer, an unwinding of these out-of-the-money calls could pressure the book stock even lower.
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