Options Trading News

April 13, 2012  Fri 12:11 PM CT

Coventry Health Care has seen a steep pullback this month, and the bulls are stepping into the managed-care company ahead of its earnings report in two weeks.

optionMONSTER's Heat Seeker shows that 2,718 July 34 calls were bought today for $1.60 and $1.65. Open interest was just 115 contracts at the beginning of the day, so these are new positions.

CVH is off 0.57 percent to $33.12 in afternoon trading. It climbed past $36 to an eight-month high at the end of March but has dropped sharply in April, finding support around the $33 level this week at its 50-day moving average.

Overall calls in the name are nearly 3 times its daily average. Not a single put has traded in Coventry all day.

The company is scheduled to release first-quarter earnings results in the pre-market on April 27.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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