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July 3, 2013  Wed 5:59 AM CT

ANF: SEE CHART GET CHAIN FIND STRATEGIES
Abercrombie & Fitch has been rebounding, and traders are looking for the comeback to continue.

optionMONSTER's Heat Seeker tracking program detected strong buying in the August 50 calls yesterday for $1.26 to $1.86. More than 4,500 traded in volume well above the previous open interest of 2,944 contracts, indicating that new positions were initiated.

Long calls lock in the price where shares can be purchased, which can provide significant leverage to moves in the underlying stock. But the contracts will expire worthless without a rally by mid-August. (See our Education section)

ANF rose 3.77 percent to $47.93 yesterday. The specialty retailer had rough couple of months in May and June, falling after its last earnings report and then along with the rest of the market. But the stock rose sharply after bouncing at the $44 level last week and is now back above its 200-day moving average.

Total option volume was 5 times greater than average in the session, with calls outnumbering puts by 2 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)
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