Masco Can't Shake the Bears

Masco (MAS) reported strong earnings Monday and raised its guidance, but the bears haven't gone away.

optionMONSTER's Depth Charge tracking system detected the purchase of 5,000 December 10 puts for about $0.25 against no existing open interest. The trade was more than 11 times the size of all options volume yesterday.

MAS fell 4.66 percent to $12.47 in morning trading. The maker of building supplies such as Behr paint and Delta faucets more than tripled between its March lows and early August. It then encountered resistance at an old support level from July 2008 and began trending lower.

The shares must fall another 23 percent by December expiration for today's put buyer to earn a profit. About 1,900 January 10 puts were also sold for $0.35 against open interest at about the same time the December puts were bought. The trades may result from an investor moving an existing position closer by a month on the expectation a drop is coming sooner than previously thought.

Puts in MAS outnumbered calls by more than 400 to 1 today, reflecting the bearish sentiment.

(Chart courtesy of tradeMONSTER)