How the bulls are playing Neonode

optionMONSTER

Bullish traders are looking for Neonode to break by early next year.

optionMONSTER's Heat Seeker system shows that 1,630 January 8 calls were purchased yesterday, mostly for $0.50. This is clearly fresh buying, as open interest in the strike was just 4 contracts before the session began.

These long calls , which lock in the price where traders can buy shares no matter how far they might rise, are betting that NEON will rally above $8.50 by mid-January. But if shares remain below the $8 strike price, those options will expire worthless. (See our Education section)

NEON rose 3.85 percent yesterday to close at $5.40, just below its 100-day moving average. The company, which manufactures infrared touchscreens, has been drifting lower since hitting overhead resistance above $6 in the last month.

Overall option volume in the name was nearly 16 times its daily average for the last month. Calls outnumbered puts by a bullish ratio of more than 71.5 to 1.

The company is scheduled to present at the 10th Annual Craig-Hallum Institutional Investor Conference tomorrow and at Cowen's 41st Annual Technology, Media & Telecom Conference on Thursday.



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