EMC attracts heavy call buying

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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 Chart 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 May 26.

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)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Options

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