While

EMC's

(EMC)

stock may be one of the few tech titans that has held up reasonably well amid the horrific year for tech, some options market pros are playing more for downside in the stock than upside promise.

As of Friday's close, EMC's stock was up 24.7% year to date, but down about 35% from its 52-week intraday high of $104.94. While the stock's been beaten up lately, it is still frequently mentioned by market participants as one of the big tech stocks that have held up well in 2000 relative to the decimation seen elsewhere in the market.

On Friday, EMC, the leading data-storage company, got hammered, falling almost 9%. The stock had bounced back a bit early Monday but the rally faded and it was off 38 cents to $67.75. The downdraft in EMC

Friday mostly was blamed on

Bear Stearns

cutting its rating on EMC to attractive from buy.

The recent action in shares of EMC, however, has some options market analysts cautious on the stock.

Joe Sunderman, an analyst at options firm

Schaeffer's Investment Research

, said he sees $60 as a potential level of support for EMC because there is put option support there, and that is also the stock's 20-month moving average. He said at current levels he'd be cautious buying the stock; he'd "be more interested at $60." Put option support exists when there is a high number of contracts originated at a strike price.

Meanwhile, one options market strategist is recommending its clients get on the short side of the EMC story.

EMC had heavy put volume Friday as it fell through multiple support at $74 and $69, closing at $68.13, noted Larry McMillan of

McMillan Analysis

in today's note to his clients. The strategist pointed to stock patterns he said have been lousy for some time. He said the pattern of a stock breaking through support along with heavy put option volume has lately signaled lower prices for the underlying stock. To profit from that, he said that instead of shorting the stock, he'd buy puts, despite the inflated prices for the options.

McMillan's recommendation was to buy the January 70 puts at 8 1/2 ($850) or lower. The price on the options is working out for the recommendation so far, with the January 70 puts trading up 3/8 ($37.50) to 8 3/8 ($837.50) on the

Chicago Board Options Exchange

. Those puts had traded as low as 6 7/8 ($687.50) on the CBOE Monday as the stock had rallied earlier in the session.

Investors typically buy puts to hedge stock positions or speculate on a drop in a stock or index value. Conversely, calls are bought to speculate on a rise in the underlying security's value.

EMC's survival of the tech sector's 2000 bloodbath is being reflected in its expensive valuation (at least by traditional standards). EMC's forward price-to-earnings ratio based on earnings projections for fiscal 2001 currently stands at a rich P/E of about 66.

Alan Goldstein of

Five Dollar Trading

in Chicago noted that there is a definite skew toward higher prices in EMC's out-of-the-money puts than in the call options, suggesting to some that EMC's short-term prospects could be rocky.

Not surprisingly, the CBOE equity put/call ratio plummeted Monday after being sharply higher Thursday and Friday. And some traders said that volume overall was quiet in the wake of triple-expiration on Friday.

"It's a fairly quiet day," said Goldstein. He said even with the

Federal Open Market Committee

meeting tomorrow, there's "not a lot of volume."

Sunderman pointed out that on Thursday, the CBOE equity put/call ratio closed at 0.86, while on Friday it went out at 0.91, showing 91 puts trading for every 100 calls.

He said those two readings, no matter what the market environment, "are notable and are extreme." However, what he's been waiting for is, in addition to the high put/call ratios, a high reading in the

CBOE Volatility Index

, or VIX. He said there still needs to be a healthy dose of fear, not only reflected in the put/call ratio, but also with the VIX. Even during the selling cavalcade last week, the VIX didn't reach levels during the market selloffs in October. The VIX rises generally when put buying on the

S&P 100

, or OEX, increases.

In the contrarian school of thought in the options market, the higher the readings on the put/call ratio and the VIX, the better for stocks. Contrarians believe that with so many people buying puts either for protection or to speculate on further downside for the underlying securities, the opposite of what the majority are doing will occur.