Bulls Buying Natural Gas Producer After Share Pullback

EQT had a pullback after a big move, and now the bulls are looking for more upside.

OptionMonster's real-time systems detected the purchase of more than 2,700 September 55 calls against open interest of just 330 contracts. The first blocks priced for $0.85, but premiums climbed to $1.05 as the stock pushed higher.

EQT ended yesterday's (Thursday's) session up 4.03 percent to $49.85. (Seetickerfor today's share quotes.) It rallied more than 50 percent between late September and early this month but since then has been consolidating while finding support at its 100-day moving average. Some chart analysts may consider this evidence that it remains in a bullish uptrend.

The Pittsburgh-based company has been riding a wave of bullish sentiment amid natural-gas names. It has steadily increased value in recent years by growing reserves and yesterday reported earnings that were significantly above consensus.

Management also raised full-year guidance amid strong production in the Marcellus shale region in eastern Pennsylvania.

Yesterday's call buyer stands to benefit from the long period until the contracts expire, which allows several months to profit from a rally.

Overall option volume in the name was 35 times greater than average, with calls accounting for a bullish 83 percent of the total.


Russell has no positions in EQT.

Other NatGas Producers:

Anadarko Petroleum


Devon Energy

Noble Energy

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David Russell is a reporter and writer for OptionMonster.