Bulls See Visa Shares Breaking Through Resistance

Some bulls are looking for a breakout in Visa as it bucks resistance around $80.

OptionMonster's tracking systems detected more than 8,000 June 82.50 calls, most of which priced for $1.28, against open interest of just 1,325 contracts. There was also heavy buying in the June 80 calls for $2.08 and the May 80s for $0.80 and $0.90.

Visa stock rose 0.57 percent to $79.86 yesterday and is up 11 percent since mid-March. (See ticker for today's quotes.) The credit-card company reported better-than-expected earnings and revenue last week, fueled by a rebound in consumer spending.

The shares have been struggling after worries about increased regulations caused them to crash one year ago. The $80 level was crucial around that move, serving as support immediately before the plunge and then resistance.

Given the strength in retail spending and improvements in employment, investors are now apparently looking past the regulatory risks and focusing on long-term growth as consumers around the world adopt plastic as a form a payment.

Overall option volume was more than triple the daily average in Visa, with calls outnumbering puts by almost 4 to 1.


Russell has no positions in Visa.

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David Russell is a reporter and writer for OptionMonster.