Forest Oil Pullback Brings Out the Bulls

Forest Oil

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slipped below $7 yesterday, but attracted bullish option activity.

More than 5,900 August 8 calls lit up OptionMonster’s tracking systems, including one chunk of nearly 4,000 that traded for $0.40. Those were followed by July 8 calls, which priced for $0.15, and even some buying in the July 9s.

Forest Oil

Those options lock in the price investors must pay to buy shares. The callscan generate some nice leverage if the stock rallies, but will expire worthless if it doesn't.

Forest Oil shares fell 5.18 percent to $6.95 yesterday. The company is an independent oil and natural-gas producer that operates primarily in Texas.

Energy has clearly been the dominant theme in the option market for the last week or so, and yesterday’s action was looking for Forest Oil to get its mojo in gear.

Calls outnumbered putsin the name by about 15,000 to 600, reflecting the bullish sentiment in the session. Total volume was more than 10 times greater than average.

—BY CNBC Contributor Pete Najarian

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Pete Najarianis a professional investor, CNBC contributor, regular co-host of CNBC’s “ Fast Money ” and co-founder of . Najarian has no positions in Forest Oil.