Bears Moving into Avalon Bay

| About: AvalonBay Communities, (AVB)

By David Russell

AvalonBay Communities (NYSE:AVB) owns high-end apartment buildings, and bears are the newest residents.

AVB Chart

optionMONSTER's Depth Charge tracking program detected the purchase of 3,100 April 80 puts for $4.70 against open interest of 218 contracts. The transaction breaks a bullish pattern in the name over the past 20 sessions, during which calls accounted for 83 percent of the volume on average.

AVB, which is up a penny to $85.26 in morning trading, has risen 24 percent in the last month. The real estate investment trust has been climbing in December following an upgrade from Goldman Sachs and after breaking free of a three-month consolidation pattern.

Short interest represented a hefty 16 percent of the float on Nov. 30, so forced buying may have contributed to the rally.

Today's put buyers are positioning for a retracement of the gains and will make profit if AVB declines by 12 percent or more by expiration.

The company last published results earnings on Oct. 28 and hasn't yet scheduled its next release date.

Overall options volume in the name is about 16 percent below average so far in the session, with puts outnumbering calls by 28 to 1.

(Chart courtesy of tradeMONSTER)