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November 26, 2013  Tue 4:45 AM CT

CIE: SEE CHART GET CHAIN FIND STRATEGIES
Traders are looking for Cobalt International Energy to bounce.

The Houston-based oil driller, which operates in the Gulf of Mexico and off the west coast of Africa, bounced at a 52-week week low of $21.53 last week after bleeding lower since the summer. And yesterday the option paper started to flow.

optionMONSTER's Heat Seeker monitoring program detected steady buying in the January 25 calls throughout the session, with almost 19,000 contracts changing hands. The biggest blocks priced for $1.14 and $1.25.

Volume was below open interest in those, so it's not entirely clear that new money was put to work. But a block of 10,0000 January 22.50 calls was also purchased for $2.15 against previous positioning of just 5,369 contracts.

CIE fell 2.24 percent to $22.65 yesterday. It's been trying to hold support around the same $22 level where it bounced in November 2012 and again last month, which could make some chart watchers think that it's ready to bounce. (See our Education section for more on long calls, which let investors cheaply control a move to the upside.)

The shares plunged on Aug. 19 after a 36,500-foot well in the Gulf of Mexico failed to discover commercially viable oil deposits. They rebounded on Oct. 29 on more successful results off the coast of Angola.

Total option volume was 7 times greater than average in the session, according to the Heat Seeker. Calls outnumbered puts by a bullish 10-to-1 ratio.
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