Cemex jumped to a key level yesterday, and traders are looking more upside in the Mexican cement company.
About 2,000 August 10 calls traded in a strong buying pattern as premiums rose from $1.10 to $1.28, according to optionMONSTER's Heat Seeker tracking system. The volume was well above the strike's open interest of just 122 contracts before the session began, indicating that these are new positions.
These long calls , which lock in the price where traders can buy the stock, are looking for CX to continue rallying through mid-August. But they will track the share price closely because they are in the money and will rapidly lose value if the stock doesn't move quickly. (See our Education section)
CX rose 5.73 percent yesterday to close at $11.08, just above its 50-day moving average. The stock is down sharply since hitting a four-year high of $12.57 on May 15 but may be breaking out of a tight range in place for the last two weeks.
Cemex saw bullish call buying at the October 10 strike on June 17, followed by upgrades from Barclays and Morgan Stanley in the next week. The company is scheduled to report second-quarter results on July 25.
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