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Bulls chipping into NXP Semiconductors

By: optionMONSTER
Posted: 7/10/2012 5:46:00 AM
Referenced Stocks: NXPI

NXP Semiconductors is back on the bulls' radar.

Our Heat Seeker tracking system detected the purchase of more than 1,700 August 22.50 calls, most of which priced for $1.40. Volume was more than triple the previous open interest, indicating that these are new positions.

Those long calls lock in the price investors must pay to buy shares in the company, whose chips are used in wide array of applications, including automotive, wireless, and lighting products. They can generate significant leverage in the event of a rally but will expire worthless if the stock doesn't move. (See our Education section)

NXPI fell 0.94 percent to $22.13 yesterday. The stock rallied from about $15 to $27 between January and late March, then pulled back below $20 and has been working its way higher since. Investors have recently focused on use of the company's technology in so-called near-field communications (NFC), which will let people charge their credit cards by tapping their cell phones.

The last earnings report in April was strong as management issued bullish guidance. Shares also gapped higher with no clear headline on June 29 and have been holding their ground since. The next set of quarterly results comes out before the bell on July 24.

(A version of this post appeared on InsideOptions Pro yesterday.)