Construction is getting back in gear, and traders are playing
the trend with cement giant Cemex.
optionMONSTER's Heat Seeker system shows that volume picked up
early in the December 10 calls. The large initial blocks priced for
$1, followed by prints for $1.30 later in the morning. Almost 4,600
contracts traded, compared with previous open interest of just 309
lock in the price where shares can be purchased, letting investors
cheaply position for a rally. Today's trade is especially
noteworthy because they used
contracts that will closely track movement in the underlying stock
price. (See our
CX stood at $10.55 when the calls hit, but then it started moving
and is now up 3.02 percent to $10.90 in afternoon trading. It spent
most of the month consolidating around the same $10.50 level that
was resistance in February, which could make some chart watchers
think that it's ready to start rallying again.
The stock appreciated almost 500 percent between late 2011 and May
2013 as homebuilders rose. The entire group has been consolidating
for months, and traders are looking for a continuation of that
earlier move. (See our
service to analyze the performance of more than 100 industry groups
over different time frames.)
Interest rates have been falling in the last month, promising to
increase home affordability. PulteGroup, the largest builder by
revenue, also reported strong results today and expressed
confidence demand will improve.
Total option volume in CX is triple the daily average so far today,
according to the Heat Seeker. Calls outnumber puts by a highly
bullish 7-to-1 ratio.
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