Is LyondellBasell poised to break out?


LyondellBasell Industries is pausing at a key level, and the bulls are looking for a breakout.

optionMONSTER's Heat Seeker tracking program detected the purchase of 2,250 September 45 calls for $3.50 and the sale of an equal number of September 55 calls for $0.80. Volume was more than 11 times open interest at both strikes.

This bullish call spread cost $2.70 to open and will earn a maximum profit of 270 percent if the chemical maker closes at or above $55 on expiration. (See our Education section)

LYB rose 3.91 percent to $42.83 yesterday and is up 31 percent so far this year. The stock is attempting to hold the same price range where it peaked in 2011, and some traders may expect a strong rally if resistance gives way.

The company emerged from bankruptcy in 2010 and has continued to repair its balance sheet since then. It announced a big debt buyback in October, and its credit rating was raised from "junk" to "investment grade" by Standard & Poor's last month.

Overall option volume was nearly 7 times greater than average yesterday, with calls outnumbering puts by 4 to 1, according to the Heat Seeker.

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: LYB

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