Traders are looking for historic levels in technology stocks as
the sector tries to break more than a year of underperformance.
optionMONSTER's Heat Seeker monitoring system detected heavily call
buying in the SPDR Technology Fund, whose components include
industry heavyweights such as Apple, Google, Intel, and Microsoft.
Activity focused on the contracts expiring in three weeks, on Sept.
27, at the Weekly 33 strike. Almost 26,000 contracts traded, most
of which priced for $0.07.
Calls lock in the price where shares can be purchased in the fund,
a major benchmarks for the sector. It hasn't seen $33 since the
first half of 2001 when the dot-com bubble was deflating, so
today's trader definitely thinks sentiment is getting better.
XLK is up 1.02 percent to $32.10 in afternoon trading. It lagged
the broader S&P 500 in the last year but has started to
outperform in recent weeks as investors focus on a stronger global
economy and increased telecom spending.
Another potential catalyst is a presentation by AAPL tomorrow, at
two new iPhones are expected to be unveiled. AAPL is the largest
member of XLK, accounting 15 percent of the portfolio. Our
market scanner tracks the performance of the fund's
. (See screen shot below)
Total option volume in XLK is triple the daily average so far
today, with calls outnumbering puts by a bullish 52-to-1 ratio. The
Heat Seeker also showed unusual buying in Intel's December 24 calls
as investors look for the semiconductor giant to remain strong into
I own INTC calls.
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