Breakout seen for American Tower

By David Russell,

Shutterstock photo

American Tower is bucking long-term resistance, and the bulls are looking for a breakout.

optionMONSTER's Heat Seeker tracking system detected the purchase of about 5,000 contracts each in the August 52.50 calls for $1.95 to $2.30 and the July 52.50s, most of which priced for $0.95.

AMT rose 3.73 percent to $54.28 on Friday and has spent the last six months pushing against its previous peak established at the height of the tech bubble in early 2000. The company, which owns a network of wireless-communications towers, reported accounting losses for years because of depreciation and interest payments.

Those expenses have shrunk in relation to its growing revenue base, and now the company wants to transform itself into a real-estate investment trust. That will effectively reduce taxes and result in hefty dividend payments. Other stocks have gained significantly following similar moves.

AMT had gapped lower on June 3 after receiving a subpoena from the Securities and Exchange Commission, but it then proceeded to make a higher low and now seems to be continuing its uptrend.

Overall option volume was 10 times greater than average in Friday's session, but calls outnumbering puts by 27 to 1.

(A version of this post appeared on InsideOptions on Friday.)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: AMT

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