Despite rallying sharply throughout the week, shares of Wachovia (WB: sentiment, chart, options) have shed some of those hard earned points today. Recapping a bit, the company "wowed" the Street on Tuesday when it reported a wider-than-expected quarterly loss. Company CEO Robert Steel noted in a conference call that the company "has no plans to issue common stock to raise capital," citing "lots of other options."

Fast forward to today, and we find WB down more than 8% following downgrades by Morgan Keegan and S&P Equity Research, and news that the company's chief financial officer will resign once the company finds a replacement. On the brokerage front, Morgan Keegan cut WB to "underperform" from "market perform," and issued a price target of $11 per share. S&P Equity, meanwhile, slashed WB to "strong sell" from "sell" - i.e. they really, really, really don't like the shares.

Looking at Zacks.com analyst data, it would seem that things can't get much worse, as 12 of the 14 analysts following the equity rate it a "hold" or worse. Meanwhile, options players have pushed WB's Schaeffer's put/call open interest ratio (SOIR) to within 1 percentage point shy of an annual peak - indicating an extreme degree of pessimism from the group.

That said, WB is deserving of quite a bit of this pessimism, as the stock has declined more than 58% so far this year. What's more, the equity's earnings-induced rally was halted at short-term resistance in the 19 region. Investors should also keep an eye on WB's 10-day and 20-day moving averages. The stock reclaimed these trendlines earlier this week, and a move back below them could signal an influx of additional selling pressure.