Bull dips into AmerisourceBergen

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AmerisourceBergen more than doubled after the market bottomed in March 2009, and one investor is looking for the rally to continue in 2011.

optionMONSTER's Heat Seeker tracking system detected the purchase of 1,670 January 2012 40 calls for $1.49 to $1.50. Volume was more than triple open interest in the strike.

ABC ABC is down 0.35 percent to $34.28 in morning trading but has risen 11 percent in the last month. The drug distributor peaked around $33 in June and spent the next five months trapped below that level.

Last week, however, it seems to have broken through the resistance and touched an all-time high of $34.50 on Thursday. Some traders may consider this evidence that ABC is ready to start climbing again.

The fundamentals are pretty strong as the company benefits from a strong secular trend in the pharmacy-benefits sector, where third parties help health insurers reduce drug costs. ABC beat profit and revenue forecasts the last time it reported earnings on Nov. 2.

Some investors may consider the stock inexpensive because it has a price/earnings growth ratio of about 1.13 times, relatively low for such a large company in a non-cyclical industry.

Overall option volume in ABC is triple the daily average so far in the session, with calls outnumbering puts by 14 to 1.

(Chart courtesy of tradeMONSTER)




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

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


This article appears in: Investing , Options

Referenced Stocks: ABC

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