This Construction Firm Poised to Pop This Week: Trader
McDermott International has been pushing against resistance at $28, and one trader is looking for a pop this week.
OptionMonster's tracking systemsdetected the purchase of about 9,400 April 28 calls against open interest of 297 contracts. A large transaction for $0.20 accounted for most of the activity.
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The oil-services and construction company rose 2.10 percent to $27.76 on Friday and is up 10 percent in the last month. The stock has been climbing since reporting better-than-expected fourth-quarter earnings on March 2.
The shares have returned to the same level where they consolidated immediately before 2008 market crash, which served as resistance in September. Since then they have been making incrementally higher lows and staying above their 200-day moving average, which some technical analysts may interpret as evidence of a bullish trend.
The stock needs to climb only about 2 percent by expiration on April 16 for the calls to turn a profit. Friday's call buyer is apparently wagering on a quick pop if resistance is broken.
Overall options volume in the name was about nine times greater than average, and calls accounted for a bullish 95 percent of the activity.
McDermott Competes With:
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David Russell is a reporter and writer for OptionMonster.