Bulls want Tesoro to live up to name

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Investors still think there is fertile ground in Tesoro.

The Texas oil refiner, whose name means "treasure" in Spanish, has been galloping higher along with most other companies in the industry in the last three months. Yesterday it climbed another 3.02 percent to $19.12 after briefly trading to its highest price since September 2008.

TSO Judging by the activity on optionMONSTER's Heat Seeker tracking system, the bulls are looking to run further with TSO. Some 11,723 calls traded overall, more than 10 times greater than the average for a single session. The May 18s were the most popular, purchased in size for $2.06 to $2.17 in volume of 4,700 contracts that was nearly twice the open interest.

There was also buying in the February 20s for $0.64 to $0.72. The puts were above normal levels but mostly sold, which can also be bullish because it reflects a belief that the stock has only limited downside.

Refinery stocks have been doing well recently after missing out on the rally that swept most stocks beginning in March 2009. They spent several quarters cutting capacity and are now reaping the rewards in the form of better margins as the economy rebounds and demand improves.

TSO, for instance, is up 42 percent in the last six months. Others, such as Western Refining and Valero Energy, are up 90 percent and 35 percent respectively. All three names have made frequent appearances on Heat Seeker during that time.

Overall option volume in TSO was about 9 times greater than average yesterday. Its next earnings report is scheduled for before the bell on Feb. 3.

(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: TSO , VLO , WNR

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