Markets

Fuel-cell bulls turning to Maxwell

Maxwell Technologies has pulled back following a huge rally, and now the bulls have returned.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 1,000 December 15 calls for $1.60. Volume was more than twice open interest at the strike, which indicates that new money was put to work on the long side.

These long calls lock in the price where investors can buy a stock, ensuring that they won't miss a run while also limiting the amount of money they can lose to the downside. That especially makes sense with earnings scheduled for next Thursday, July 31, after the closing bell. Today's contracts can also generate significant leverage thanks to their low initial cost. (See our Education section)

MXWL is up 0.17 percent to $12.67 in afternoon trading. It more than doubled between January and late May but has been bleeding lower for the last month. Profit and revenue both beat consensus the last time it announced results.

The stock has been moving along with fuel-cell companies such as Plug Power and Ballard Power as investors get excited about their power-saving technology, which is increasingly used in applications like railroad brakes, truck starters and power grids. ( Fuel cells are also the strongest group on researchLAB in the last two weeks.)

Our customers already made a killing in PLUG, whose short-term calls lit up the Heat Seeker on Monday morning. They inflated about 400 percent by the next day.

Overall option volume is 19 times greater than average in MXWL so far today, with calls accounting for a bullish 96 percent of the total.

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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