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Why bulls are sticking with NXP Semi

Posted
12/27/2011 1:21:00 PM
By: optionMONSTER
Referenced Stocks:NXPI

NXP Semiconductors is still finding buyers.

The Dutch chip maker lit up our Heat Seeker tracking program last week as investors snapped up its February 15 calls for $1.80 to $1.95. It's been grinding higher since then, and those contracts are now bid at $2.10.

The bulls went back to work this morning, shifting one month closer to the January 15 calls. More than 2,700 have traded, most of which priced for $1.45. The stock is fighting back from earlier losses and is now at $15.97, up 0.95 percent in afternoon trading.

NXPI got cut in half between April 2011 and August but since then has held support around the same $14 level where went public in August 2010.

One potential catalyst for the stock in 2012 is the growth of Near Field Communications (NFC), which will let consumers pay for items using their cell phones. The implementation of Google Wallet is expected to spur use of the technology.

Overall option volume in NXPI is triple average amount so far today, with calls outnumbering puts by 9 to 1.