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.
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
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
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)