How the bulls are playing Tempur Sealy

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Tempur Sealy has been holding support at a key level, and now the bulls are looking for a rebound.

optionMONSTER's Heat Seeker monitoring program detected the purchase of more than 1,600 September 50 calls for $6.70. Volume was more than 12 times previous open interest at the strike, which indicates that new money was put to work on the long side.

Those holders now have the right to buy shares in the mattress company for $50 over the next six weeks, no matter how high they may go by expiration. That can result in significant leverage if the stock keeps climbing. (See our Education section.)

TPX rose 1.29 percent to $55.59 yesterday. It's been sitting around $55 since profit missed estimates last month, holding the same level where it peaked in December and May. Sales, however, beat forecasts and management issued strong guidance, which could make some investors bullish on the name.

Total option volume was more than twice the daily average, with calls outnumbering puts by more than 30 to 1.




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: TPX

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