EMC fell along with the rest of the market yesterday, but some
traders still see upside in the cloud-computing name.
optionMONSTER's Heat Seeker tracking system detected steady and
significant purchases of the July 20 calls, which changed hands
29,506 times against open interest of 20,900 contracts. Most of the
volume priced for $0.28 to $0.30, though premiums either rose or
held their ground as the shares edged lower, which confirms the
strong buying pattern in the options.
EMC fell 0.57 percent to $19.24 yesterday. The data-storage stock
has been consolidating above $19 since March after spending the
previous five months attempting to break resistance at the same
level, which was its peak in 2008. It's also been making
incrementally higher lows and following its 200-day moving average
higher--further possible evidence of an uptrend.
The company has been holding up better than most in the market,
benefiting as enterprises migrate servers to cloud-computing
facilities. It's recently been surging higher along with smaller
rival NetApp, which crushed estimates and raised its guidance on
EMC's last earnings report on April 21 was also better than
expected, and management boosted its full-year forecast.
Our monitoring programs also detected buying in the August 20 calls
for $0.64 to $0.65 and selling in the August 18 puts for $0.39 to
$0.54, both of which reflect bullish expectations for the stock.
Overall options volume in EMC was nine times greater than average
in the session.
(Chart courtesy of tradeMONSTER)