Tech has been coming back to life, and the bulls think Juniper
Networks is ready to break out.
optionMONSTER's Heat Seeker monitoring system has shown unusual
call activity in the provider of networking equipment during the
last two sessions. Yesterday, they
bought the July 21 calls
for $2.85, and today they're amassing the April 22s in size for
$1.92. More than 5,000 have traded so far against previous open
interest of 3,591 contracts.
lock in the price where a stock can be purchased, letting investors
cheaply position for a rally. The strategy makes sense in JNPR,
which has been fighting long-term resistance around $22 all month.
This way, they can bet on a breakout, but also have much less
capital tied up compared with owning shares. (See our
section for more on managing risk with options.)
JNPR is up 0.73 percent to $22.07 in afternoon trading. While its
12 percent year-to-date gain has lagged the S&P 500, most of
the move has occurred in the last month. That matches a similar
trend in the technology space as investor sentiment shifts in favor
of the sector as a growth pick for 2014 and away from
consumer-discretionary names, as seen on our
Total option volume in JNPR is twice the daily average so far
today, with calls outnumbering puts by a bullish 9-to-1 ratio.
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