Options See Upside for This Oil & Gas Name
By: Cameron International has been under pressure since March, but last week it started to push higher as option traders turned bullish on the oil and gasname.
First, a Barclays survey found that worldwide energy exploration and production activity is still going strong and could reach $529 billion, 8 percent higher than the brokerage forecast in December. Then on Tuesday, Gabelli & Company upgraded Cameron to "buy" from "hold," expecting it to benefit from a new build cycle for shallow- and deep-water rigs, as well as blow-out preventers.
CAM ended Friday's session up 0.09 percent to $46.11, and option bulls were looking up in price and out in time. (See ticker for today's quotes.) More than 2,400 November 55 calls were purchased for $1.95 and $2, according to OptionMonster's tracking systems. Open interest in the strike was just 119 contracts when the session began.
The shares have been pushing higher after testing their lowest price since November on Monday, despite the pullback in oil. That, plus the call buying, suggests that the next move could be higher.
Disclosures:
Pete Najarian has no positions in CAM.
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Oil & Gas Works—Other Players:
National Oilwell Varco
Weatherford International
Schlumberger
Transocean
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Options Trading School:
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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.
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