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Bulls jump aboard OCZ Technology

After years of obscurity, OCZ Technology Group seems to be hitting its stride.

The maker of solid-state hard drives said fiscal fourth-quarter revenue surged 97.5 percent to $64 million from a year earlier, crushing the $53.36 million consensus analyst forecast. Complete results for the period, which ended last month, will be released in April.

OCZ surged 12 percent to $8.81 in morning trading and is pushing against a peak established three weeks ago. The shares have more than quadrupled since August.

The options activity on our Heat Seeker tracking system was equally bullish: Traders snapped up more than 1,800 September 10 calls for $1.15 to $1.20 and 1,200 June 10 calls for $0.75 to $0.90. Volume was more than 14 times open interest in both strikes.

The company went public in 2006 on the Alternative Investment Market, a sub-market of the London Stock Exchange for small companies. It then carried out several acquisitions, changed its certificate of incorporation, and voluntarily delisted itself in April 2009 before joining the Nasdaq one year later.

OCZ appears to be tapping the quickly growing demand for computer storage and derived 78 percent of revenue from servers. Makers of traditional hard drives with moving parts, such as Seagate Technology and Western Digital, have struggled amid excess capacity and waning margin pressure. Today, however, WDC and STX are both up after a major acquisition in the sector.

Solid-state hard drives, on the other hand, command higher prices because they are faster and less prone to error. OCZ appears to have spent years positioning itself to exploit this new market, and today's preliminary earnings report may establish it as a new rising star among technology investors.

Overall option volume in the stock is 16 times greater than average today, with calls accounting for a bullish 84 percent of the activity.

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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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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