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October 4, 2012  Thu 11:35 AM CT

STX: SEE CHART GET CHAIN FIND STRATEGIES
Seagate is holding the $30 level, but today's option activity anticipates only limited upside.

A trader sold 6,400 January 34 calls for the bid price of $1.20, according to optionMONSTER's tracking systems. That volume was nearly 10 times the open interest of 654 contracts in the strike at the start of the session, clearly indicating a new position.

The call selling is based on the idea that STX won't see much upside beyond $34. The options may have been sold naked with an initial bearish bias, or they could have been traded against long stock in a covered call position. The latter would be bullish up to the strike price but not above it. (See our Education section)

STX is up 0.47 percent at $30.19 this afternoon and has held support at this level for the last month. The computer hard-drive maker hit a 52-week high of $35.71 in mid-August.
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Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  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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