Advanced Micro Devices always seems to lag behind archrival Intel, but now the bulls are looking for it to move front and center.
Less than two hours into yesterday's session, detected heavy call buying in the chipmaker. The June 10 contracts saw volume of more than 15,000 against open interest of 1,365 contracts. Most of the transactions priced for $0.15 to $0.18, so traders were definitely placing a cheap bet on a rally.
The June 11 calls traded 8,152 times at about the same time, with institutional-sized prints going for $0.39 to $0.49. Call volume exceeded puts by a bullish 6-to-1 ratio.
AMD rose 4.63 percent to $9.49 yesterday and has rebounded 22 percent from the lows of last week's selloff. Strong demand helped the company beat profit and revenue forecasts the last time it reported quarterly results on April 15.
The stock has been bumping up against resistance at $10 since late last year, and the bulls appear to think that it will break out this time.
The call buying came ahead of a conference call yesterday about AMD's Vision line of chips, which make it easier for customers to watch and edit video. Another event to watch for is the company's appearance at Barclays Capital Global Communications, Media & Technology Conference before the market opens on May 26.
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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of .