Markets

Bulls can't get enough of Himax

The bulls keep piling into Himax Technologies as the chip company climbs from long-term support.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,600 October 8 calls for $0.40. Volume was almost twice previous open interest at the strike, which indicates new money was put to work.

Long calls lock in the price where investors can buy a stock, letting them profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis. (See our Education section)

HIMX is up 3.86 percent to $7.93 in afternoon trading and has gained 15 percent so far this month. The stock has given our premium investors multiple winning trades as it bounced off $6 in the last two years. That's the same level where it peaked in 2007 and 2008.

The company mostly focuses on liquid-crystal displays. Although the last quarterly report was mixed, with revenue missing estimates, Bank of America Merrill Lynch has emphasized the potential for growth in China and last week raised its price target to $10.75 from $8.50.

There was also bullish paper of late, including the January 8 calls on Aug. 31 and the March 8s on Sept. 25 .

Total option volume is twice average amounts so far today, with calls outnumbering puts by 268 to 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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