Plum Creek Timber has broken out to its highest levels since the 2008 market crash, and some traders expect it to keep running.
OptionMonster's tracking systemsdetected the purchase of more than 13,000 August 45 calls, mostly for $0.55, against open interest of 444 contracts. The activity pushed total option volume in the land company to 22 times greater than average.
Plum Creek declined 0.64 percent to $40.28 yesterday and pulled back after setting a new 52-week high of $40.81 early in the session. The company has been climbing along with other real-estate investment trusts. It also reported better-than-expected earnings on Feb. 1 and issued bullish guidance.
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The stock spent the second half of March breaking through the $39.25 area that had served as resistance since mid-January. Now that the level has been broken, traders may expect further gains.
Yesterday's call buyers are apparently positioning for that outcome and need Plum Creek's shares to climb at least 13 percent by expiration to break even. The next earnings release is scheduled for after the bell on April 26.
Overall in the session, calls outnumbered puts by 19 to 1, which reflects bullish sentiment in the name.
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David Russell is a reporter and writer for OptionMonster.