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Bulls rush Chinese aluminum maker

By: optionMONSTER
Posted: 10/7/2010 1:12:00 AM
Referenced Stocks: ACH;EEM;FEED;SINA;SOLF

Aluminum Corporation of China has been running, and the bulls are looking for more upside.

optionMONSTER's Heat Seeker tracking system detected a flood of call buying in the thinly traded Chinese company. The January 30 contracts traded 2,534 times, mostly for $0.50 to $0.55, though volume was below open interest.

ACH The November 27s changed hands mostly for $0.60 while the January 27s fetched about $1.20. Activity in both strikes was more than 7 times open interest.

ACH fell 0.95 percent to $25.14 yesterday and is up 22 percent in the last month. The company is one of the most recent Chinese stocks to attract bullish attention. There was also bullish activity in Solarfun Power yesterday.

In recent weeks, the Heat Seeker also detected surges of call buying in names such as Agfeed Industries and Sina. Separately yesterday, investors bought calls on Brazilian lender Itau Unibanco.

The activity suggests that sentiment is brightening once again for emerging-market stocks, which have started outperforming the S&P 500 in the last three months after lagging in the first half of 2010.

The call buying in ACH pushed total options activity in the name to 13 times greater than average, with calls accounting for 98 percent of the volume.

(Chart courtesy of tradeMONSTER)