Bulls seek their roots with Ancestry.com

By
A A A
Share |

Ancestry.com has pulled back after ripping higher, and the bulls are stepping in.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,500 October 30 calls for $2.85 and the sale of an equal number of October 35 calls for $0.75. Volume was above open interest at both strikes, indicating a new position was initiated.

It cost $2.10 to open and will earn a profit of 138 percent if the stock closes at or above $35 on expiration. The strategy is known as a bullish call spread because it will leverage a move between two prices. (See our Education Section .)

ACOM rose 2.61 percent to $31.03 in afternoon trading and is up about 30 percent in the last three months. The provider of family-history data has been rallying amid takeover speculation, and exploded higher on July 25 after quarter results beat expectations. Management also raised full-year guidance.

It surrendered some of those gains in the last week, but quickly bounced after finding support at its 50-daymoving average. That could make some chart watchers think the uptrend remains intact.

Overall option volume is 5 times greater than average so far in the session, according to Heat Seeker. Calls outnumbered puts by a bullish 13-to-1 ratio.



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: ACOM

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

Most Active by Volume

132,019,746
  • $16.39 ▲ 2.44%
106,930,017
  • $59.09 ▲ 0.34%
91,643,760
  • $3.09 ▼ 1.12%
79,029,415
  • $85.02 ▲ 0.29%
46,131,885
  • $40.18 ▲ 3.74%
42,395,508
  • $7.06 ▼ 0.56%
40,101,748
  • $26.76 ▲ 0.75%
39,547,363
  • $13.33 ▼ 3.96%
As of 4/15/2014, 04:02 PM