Textron is fighting its way out of a three-month consolidation pattern, and the bulls are rushing in.
OptionMonster's tracking systems detected a surge of call buying in the aircraft maker, which is scheduled to report fourth-quarter results before the bell on Jan. 28. Institutional-sized buyers snapped up the February 23 calls for $0.55 to $0.70, pushing volume to 9,860 contracts—23 times open interest.
Textron rose 5.35 percent to $21.47 yesterday. The company's revenue and profit beat analysts' forecasts the last time it reported results on Oct. 27.
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The shares have been trading between $17 and $21 since mid-September, making incrementally higher lows. They've been moving straight up since finding support at the 100-day moving average on Jan. 5 and closed yesterday at their highest level since October 2008.
Textron must rally 10 percent by expiration for the calls to turn a profit.
Our systems also detected buying of the January 22.50 calls against open interest, while new money flowed into the March 23 calls.
Overall options volume in Textron was seven times greater than average yesterday. Calls accounted for 89 percent of the activity.
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David Russell is a reporter and writer for OptionMonster.