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Some investors view the put/call ratio as a contrarian indicator – when it reaches extreme levels, it may indicate that a turnaround is imminent.

We used this idea to screen large-cap stocks that are technically oversold (with RSI(14) below 40). We searched for those stocks that have seen significant increases in their put/call ratio over the last ten trading days.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.


(Click to enlarge)

Do you think these stocks will soon turn around? Use this list as a starting-off point for your own analysis.

List sorted by increase in put/call ratio.

1. Bancolombia S.A. (NYSE:CIB): Foreign Regional Banks Industry. Market cap of $12.60B. RSI(14) at 37.29. Put/call ratio has increased 468.89% over the last ten trading days (from 0.45 to 2.56), currently at 100% of its annual put/call range. The stock has gained 17.88% over the last year.

2. Lowe's Companies Inc. (NYSE:LOW): Home Improvement Stores Industry. Market cap of $29.77B. RSI(14) at 37.83. Put/call ratio has increased 176.19% over the last ten trading days (from 0.42 to 1.16), currently at 100% of its annual put/call range. The stock has gained 16.28% over the last year.

3. MedcoHealth Solutions Inc. (NYSE:MHS): Drugs Wholesale Industry. Market cap of $21.59B. RSI(14) at 30.89. Put/call ratio has increased 100.0% over the last ten trading days (from 0.50 to 1.00), currently at 94% of its annual put/call range. The stock has lost 4.54% over the last year.

4. Discovery Communications, Inc. (NASDAQ:DISCA): CATV Systems Industry. Market cap of $11.59B. RSI(14) at 39.66. Put/call ratio has increased 90.16% over the last ten trading days (from 2.54 to 4.83), currently at 96% of its annual put/call range. The stock has gained 18.89% over the last year.

5. Stanley Black & Decker, Inc. (NYSE:SWK): Machine Tools & Accessories Industry. Market cap of $11.72B. RSI(14) at 39.48. Put/call ratio has increased 79.41% over the last ten trading days (from 0.68 to 1.22), currently at 91% of its annual put/call range. It's been a rough couple of days for the stock, losing 6.44% over the last week.

6. Symantec Corporation (NASDAQ:SYMC): Security Software & Services Industry. Market cap of $14.33B. RSI(14) at 38.55. Put/call ratio has increased 76.92% over the last ten trading days (from 0.39 to 0.69), currently at 90% of its annual put/call range. The stock has gained 30.02% over the last year.

7. Northern Trust Corporation (NASDAQ:NTRS): Regional Banks Industry. Market cap of $10.71B. RSI(14) at 29.94. Put/call ratio has increased 73.85% over the last ten trading days (from 0.65 to 1.13), currently at 92% of its annual put/call range. The stock has lost 6.3% over the last year.

8. Raytheon Co. (NYSE:RTN): Aerospace/Defense Diversified Industry. Market cap of $16.40B. RSI(14) at 28.37. Put/call ratio has increased 67.78% over the last ten trading days (from 0.90 to 1.51), currently at 100% of its annual put/call range. The stock is currently stuck in a downtrend, trading 6.07% below its SMA20, 6.5% below its SMA50, and 5.26% below its SMA200. It's been a rough couple of days for the stock, losing 5.29% over the last week.

9. Hartford Financial Services Group Inc. (NYSE:HIG): Property & Casualty Insurance Industry. Market cap of $10.86B. RSI(14) at 34.57. Put/call ratio has increased 64.79% over the last ten trading days (from 0.71 to 1.17), currently at 100% of its annual put/call range. This is a risky stock that is significantly more volatile than the overall market (beta = 3.04). Might be undervalued at current levels, with a PEG ratio at 0.68, and P/FCF ratio at 3.41. It's been a rough couple of days for the stock, losing 7.19% over the last week.

10. Wells Fargo & Company (NYSE:WFC): Money Center Banks Industry. Market cap of $143.76B. RSI(14) at 37.60. Put/call ratio has increased 62.35% over the last ten trading days (from 0.85 to 1.38), currently at 96% of its annual put/call range. The stock has gained 4.54% over the last year.

11. Alcoa, Inc. (NYSE:AA): Aluminum Industry. Market cap of $16.47B. RSI(14) at 38.38. Put/call ratio has increased 48.84% over the last ten trading days (from 0.86 to 1.28), currently at 98% of its annual put/call range. This is a risky stock that is significantly more volatile than the overall market (beta = 2.07). It's been a rough couple of days for the stock, losing 5.49% over the last week.

12. Duke Energy Corporation (NYSE:DUK): Electric Utilities Industry. Market cap of $25.09B. RSI(14) at 39.41. Put/call ratio has increased 45.45% over the last ten trading days (from 0.77 to 1.12), currently at 93% of its annual put/call range. The stock has gained 17.89% over the last year.

*Options data sourced from Schaeffer’s, all other data sourced from Finviz.

Source: Contrarian Ideas: 12 Oversold Large Caps with Bearish Options Sentiment