Will Occidental bulls hit a gusher?

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Occidental Petroleum has pulled back to key support, and one big investor is getting long.


optionMONSTER's Heat Seeker monitoring program detected the purchase of 10,000 January 110 calls for $1.48 and the sale of an equal number of January 120 calls for $0.28. Volume was more than triple open interest at both strikes, which indicates a new bullish call spread was implemented.

The investor will now buy the oil driller for $110 and sell it for $120 if it reaches those levels by expiration early next year. They paid $1.20 to control the $10 spread, translating into profit of 733 percent from the shares climbing about 20 percent. (See our Education section for more on the leveraging power of options.)

OXY rose 0.31 percent to $100.30 in afternoon trading. It reached a two-year high of $105.64 in June, but then rolled over and slid to the same $97 level where it peaked several times between mid-October and mid-May. That could make some chart watchers think it remains in a bullish uptrend despite the broader energy sector struggling of late.

Overall option volume is 13 times greater than average in the company so far today, with calls accounting for a bullish 91 percent of the total.



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: OXY

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