Long-term bet on Motorola Solutions

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Motorola Solutions is barely a week old as an independent entity, and the bulls are already targeting it.

optionMONSTER's Heat Seeker tracking system detected the purchase of 5,000 January 2012 40 calls for $3.90 against open interest of just 20 contracts. The trade accounted for almost all the options volume in the stock during yesterday's session.

MSI MSI fell 0.29 percent to $37.85 yesterday and has been drifting lower since Jan. 4, when it was created from the breakup of the old Motorola. The company inherited most of the businesses that are not related to cell phones, such as police radios and video-surveillance equipment.

The other half of the firm was spun off into Motorola Mobility Holdings ( MMI ). After the deal was complete, the old entity that traded under the ticker MOT changed its symbol to MSI and did a 1-for-7 reverse stock split.

MSI is the larger company, with a market cap of about $13 billion, compared with about $10 billion for MMI.

Adjusted for the split, MSI peaked at $40.37 on Jan. 5. Since then it has been pulling back and now trades at a level that was resistance in late December, which may cause some chart watchers to think it's in a bullish uptrend.

Yesterday's call buying in MSI reflects a long-term bullishness in the stock, which must climb at least 16 percent over the next 12 months for the trade to turn a profit.

(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 The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: MMI , MSI

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