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February 27, 2013  Wed 9:32 AM CT

LCC: SEE CHART GET CHAIN FIND STRATEGIES
U..S Airways has pulled back to key support, and the bulls apparently think that it's ready to fly.

optionMONSTER's Heat Seeker monitoring program detected the purchase of about 20,000 March 14 calls for $0.25 and the sale of an equal number of March 15 calls for $0.06. That results in a net cost of $0.19.

The resulting position is highly leveraged to upside in the Arizona-based airline, generating profit of 300 percent if the shares climb just 11 percent in the next three weeks. (See our Education section for more on the strategy, known as a bullish call spread.)

LCC is up 1.36 percent to $13.44 in morning trading. The stock came into the session down 11 percent in the last month and has returned to the same $13 level that was resistance in late 2012, near its 100-day moving average.

Today's bullish trade comes amid strength elsewhere in the transport sector. The Heat Seeker also showed unusual activity in C.H. Robinson Worldwide and Expeditors International of Washington.

Total option volume in LCC is slightly above average so far in the session. Calls outnumber puts by 58 to 1.
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As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

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