Bulls Look for Sarepta to Rally Again

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Sarepta Therapeutics has been holding its ground for months, and now the bulls are looking for the next leg higher.

OptionMonster's tracking systems detected the purchase of about 2,500 March 25 calls, with the largest block pricing for $4. A short while later, a similar number of April 30 calls were bought for $3.20 to $4.70. There was barely any open interest at either strike, indicating that new money was put to work on the long side.

Calls lock in the price where investors can buy shares, so they can generate significant leverage in the event of a rally. But they're also susceptible to losing most or all of their value if the stock doesn't move.

Sarepta shares rose 4.98 percent to $27.61 yesterday. The drug developer is up about 2,500 percent since July, driven by strong clinical-trial data of its eteplirsen compound for the treatment of Duchenne muscular dystrophy.

The stock has been paused more recently, allowing its 100-day moving average to catch up with the share price. That could be leading some traders to believe that it's ready to continue higher.

Total option volume in Sarepta was 8 times greater than average yesterday, with calls outnumbering puts by a bullish 15-to-1 ratio.

—By CNBC Contributor David Russell

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David Russell is a reporter and writer for OptionMonster. Russell has no positions in SRPT.

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