Buyer targets Nexen on pullback

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Nexen is getting slammed lower as it grapples with resistance at its 200-day moving average, but at least one investor apparently thinks that it's a buy.


NXY optionMONSTER's Heat Seeker tracking system detected the purchase of 3,875 June 20 calls for $3.20 and $3.30 against open interest of just 213 contracts. The activity pushed overall option volume in the Canadian natural-gas company to more than twice the average level.

NXY is down 5.32 percent to $21.02 in morning trading. It's been stuck in a range between about $21 and $22.50 since mid-October after rebounding from a 12-month low of $17.20 on Aug. 25.

The company yesterday released capital-expenditure plans and said it would restart exploration in the Gulf of Mexico. After analyzing the news, Credit Suisse kept its "neutral" rating on the stock and maintained a $25 price target.

Today's option activity reflects a long-term bullish outlook on NXY and a belief it will climb at least 10 percent by late spring.

Calls are outnumbering puts by about 40 to 1 so far in the session, according to the Heat Seeker.

(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: NXY

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