More Upside Seen for Cognizant Technology

Cognizant Technology looks amazing by the numbers, with a great balance sheet, no short interest, and a gain of more than 60 percent in the last year.

Some might think that all the good news is already baked into the stock, but our Heat Seeker lit up yesterday with activity indicating that someone sees more upside ahead. Most of the trading occurred as the Indian outsourcing stock ripped off its lows of the day.

The November 67.50 calls traded in big blocks for $1.55 and the November 70 calls for $0.80. Volume surpassed 4,000 contracts in both strikes.

Cognizant's stock rose 1.77 percent to $67.18 yesterday and is less than $2 below its all-time high. The option action is clearly showing solid evidence that expectations of more gains do exist, and we shall see how that plays out with earnings around the corner Monday.

More than 10,800 calls changed hands in the name versus fewer than 2,500 puts. And total volume was about 6 times greater than average, so there was definitely some big action in the name.

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of