This bullish Barron's piece notes that Whirlpool (WHR: sentiment, chart, options) has recently fallen victim to housing market turmoil, and "more than 37% of the appliance giant's stock valuation has drained away" since hitting its June peak. However, the author argues, investors have incorrectly perceived the extent of Whirlpool's dependence on the U.S. housing market: " just 18% of Whirlpool's U.S. shipments are linked to new residential construction."

In fact, the possibilities presented by emerging markets like Brazil have proven to be a boon for Whirlpool, with sales in Latin America swelling 3% on a year-over-year basis. Additionally, the acquisition of Maytag has given WHR a critical entre into Home Depot (HD) stores, a retail avenue that was previously closed to Whirlpool appliances.

However, CEO Jeff Fettig admits that 2007 has not been without its fundamental challenges. The company suffered its steepest drop-off in U.S. demand in 21 years, and endured its "fourth year of incredibly high raw-material inflation." Despite these concerns, Fettig snapped up 10,000 shares of WHR at $84.33 recently, and stated that he thinks his company is a "great investment."

The shares of Whirlpool are now trading around the 75 level almost high enough to challenge resistance from their overhead 20-day moving average, but not quite. The shares' precipitous decline has left them on the south side of their 10-week and 20-week trendlines, as well, and these intermediate-term moving averages have provided a steadily descending ceiling for the stock since late July. WHR's continually eroding price action actually mirrors that of Home Depot shares (the suffering blue-chip retailer that's supposed to provide a lift for WHR's sales).

Despite the stock's slide down the charts, option traders remain doggedly optimistic toward WHR's prospects. The equity's Schaeffer's put/call open interest ratio is 1.09, just 1 percentage point away from an annual low. Meanwhile, the shares have now given back all their year-to-date gains and then some.

While the stock may have been oversold on housing concerns, it might be too soon to call a bottom to WHR's decline. The shares do look attractively priced now, but Whirlpool (the company) is still facing significant fundamental challenges, and Whirlpool (the stock) has plenty of technical hurdles blocking its path up the charts. In light of these concerns, the wealth of optimism we're seeing from option traders indicates that there may be more downside ahead for WHR.