This oil giant is set to rally: Trader

This oil giant is set to rally: Technician

Despite continued uncertainty surrounding energy stocks and crude oil, one trader says a combination of unusual activity and strong technical setup could mean a big bounce in one name in particular: BP.

"I've been noticing a lot of unusual options activity in BP to the long side," technical analyst and options expert Andrew Keene said Monday on CNBC's "Trading Nation." Specifically, Keene noted that options call volume ran two times its daily average on Monday, and there appears to be a large institutional buyer piling into the name.

Additionally, Keene noted that the chart of BP suggests the stock has "bottomed out" and could be setting up for a run to $46 a share. "When I look at the daily chart of BP, you can see it's making a series of higher lows," said Keene, founder of Keene on the Market. Technicians often recognize these patterns as bullish for a stock, as BP has rallied 19 percent from its December low. The most recent of these patterns, per Keene's chart work, appears to come in at the $40 level. "I think BP could break out here from here."

So taking the unusual activity and technicals into consideration, Keene decided to purchase some longer-dated calls in the stock. "I'm going to buy the January 43-strike calls for $1.20 each," said Keene. Since buying a call allows one to purchase a stock at a given price at a set time, Keene's trade is profitable if BP rises above $44.20 or 6 percent higher by January expiration.

"I think BP could trade above $46," added Keene.

To note, Keene's prediction is well above the average Wall Street analyst price target of $42.88, according to FactSet.

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