Traders are turning bullish on MIPS Technologies ahead of the chip company's earnings report tomorrow.
Nearly 4,800 November 9 calls traded strong buying pattern in the last half-hour of Friday's session for $0.20 and $$0.25, according to optionMONSTER's Heat Seeker tracking system. The volume was 6 times higher than open interest of 773 contracts in the strike at the start of the session, clearly indicating new positions.
MIPS rose 1.12 percent on Friday to close at $7.24, not far from its 52-week high of $7.65 reached on Sept. 17. Shares failed to break resistance near that level earlier this month but have held support at their 50-day moving average.
Friday's call buying is looking for the stock to gain roughly 28 percent by expiration on Nov. 16. Those options can be sold at a profit earlier if MIPS rallies, but they will expire worthless if the stock doesn't move. (See our Education section)
Total volume in the name on Friday was 9 times its daily average for the last month. Calls outnumbered puts by 14 to 1, an indication of the bullish sentiment.
The company is scheduled to report results for its 2013 fiscal first quarter on Tuesday after the close.
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