Truck maker Navistar is bouncing after a pullback, and one bull
is taking the wheel.
optionMONSTER's Heat Seeker tracking system detected the purchase
of 4,000 February 55 calls for $4.80 and $4.90 against open
interest of just 31 contracts. Total option volume in the name is
10 times greater than average.
NAV is up 3.75 percent to $58.61 in afternoon trading. It rallied
about 50 percent between September and mid-December but then
stalled around $60--about the same level where it traded
immediately before the October 2008 market crash. Many stocks
encountered resistance around comparable levels on their charts
before continuing higher.
Today's call buying in NAV comes after the shares bounced at
their 30-day moving average (dark blue line on chart) and the level
where they peaked between May and July. Some chart watchers may
consider that evidence the shares remain in an uptrend.
The company's recent results have been mixed, with profitability
hurt by procurement issues while the macro backdrop for the
industry remains strong. Last month, for instance, management
forecast the market for its vehicles will grow by about 25 percent
Another investor today made a smaller trade that reflects more of a
neutral stance, selling about 1,600 contracts each in NAV's
February 55 puts and February 60 calls for $1.55 and $2.20
respectively. The trade, known as a short strangle, generated a
credit of $3.75. See our Education Section for more.
(Chart courtesy of tradeMONSTER)
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