Has L & L Energy Hit Bottom?

Shares of L & L Energy

are trading lower on the session by 7.47%, at $2.23. The stock has been screaming lower over the past three weeks, closing significantly lower in eight out of the past nine sessions. With stock volume running at 3x the 10-day daily average and put volume running at 14x normal volume, chances are good that shares could be near a short-term bottom. The majority of the put volume is coming in February, where the $2.00 put has traded 2,650 times on open interest of 1,326 contracts. March is seeing a lot of small lot put buying, seemingly as hedges to long stock. With L & L Energy trading just nine pennies off of the intra-day, as well as 52-week low, of $2.15 the trade is easy—long stock with a tight stop. Traders looking to outlay a bit less cash and have a lower max loss can buy the March $2.00 call for $0.35-0.40, though it is a slightly pricier option. One thing seems likely though, with 9.22% short interest, longs are going to catch a few pigs off guard sooner than later. L & L Energy, Inc. produces, processes and sells coal in the People's Republic of China. As of April 30, 2011, the company's vertically integrated coal operations include four coal mines, three coal washing plans, one coking facility, and a coal wholesale and distribution network in the southwest region of China.