UAL has been outperforming, and the options action remains bullish.
The parent of United Airlines closed Friday at $15.33, up 2.34 percent on the day and just off its 52-week high of $16.34 set on Tuesday. This is right in line with resistance from October 2008 and was first broken to the downside back in April 2008 as the price of UAUA tumbled from above $52. Shares do remain 400 percent above the July 2009 low.
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One trader apparently thinks that this level will not hold and that shares could get as high as $22.50 over the next seven months. OptionMonster's tracking systemsshow a block of 6,000 September 15 calls bought for $3.30 and the same number of the September 22.50 calls for $0.95. The previous open interest was less than 500 contracts at each strike.
This call spread is very bullish going forward, betting on the idea that the stock will break above current resistance levels and continue to run higher.
UAUA Competes With:
Delta Air Lines
US Airways Group
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Chris McKhann is an analyst and writer for OptionMonster.