The shares may have gained 31% last week, but Wachovia Corporation (WB: sentiment, chart, options) isn't getting any love from Wall Street this Monday morning. Analysts at Morgan Keegan have warned investors to "be defensive and take profits" ahead of CEO Bob Steel's meeting with analysts today. In a note to clients, the brokerage firm warned, "...there are no easy fixes near term at Wachovia... We have seen this same story play out several times before during this current credit cycle where share prices have risen, ahead of fundamentals, following CEO changes."

Specifically, Morgan Keegan notes that last week's impressive rally in WB was probably spurred by short-covering. On a fundamental level, the analysts reminded traders that Wachovia maintains "significant exposure to Option-ARM (25% of total loans) and CRE loans (10%) which should continue to drive higher credit losses, requiring additional dilutive capital infusion, in our opinion."

At last check, WB shares are down more than 7%. The stock has shed 50% of its value year-to-date, though last week's rally helped it to finish atop its 10-week moving average for the first time since May. Today's plunge hasn't yet pushed the shares below their 10-day moving average, which recently completed a bullish cross with its 20-day counterpart.

Meanwhile, option players are echoing Morgan Keegan's skeptical sentiment. The equity's current Schaeffer's put/call open interest ratio of 1.59 is hovering just 3 percentage points away from an annual bearish peak. Plus, traders on the International Securities Exchange (ISE) purchased 25,228 WB puts to open last Friday, compared to 11,845 calls. The resulting single-day put/call ratio of 2.13 reveals that bearish bets on Wachovia were more than twice as popular as their bearish counterparts.