Huntsman is apparently bottoming out after a five-month selloff, and now one trader is betting on a rebound.
OptionMonster's real-time tracking systemsdetected the purchase of about 2,850 November 10 calls for $0.68 against open interest of just 423 contracts. The trade reflects a belief the chemical company will rally at least 17 percent by expiration.
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The stock is up 3.83 percent to $9.21 in midday trading but has lost one-third of its value since the beginning of March. The company has been trending lower along with the rest of the material sector despite reporting earnings in line with analysts' forecasts on May 7 and saying that a stronger economy was helping boost volumes and prices.
The declines have been slowing since the May 6 "flash crash," and Huntsman's stock seems to have subsequently formed a double-bottom pattern at about $8.20. Some chart watchers may interpret the price action as part of a bullish reversal that will be followed by a move higher.
Our systems shows calls exceeding puts by a 10-to-1 margin in the name so far today, which reflects the bullish sentiment in the name.
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David Russell is a reporter and writer for OptionMonster.