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Bulls bet Manitowoc will crank higher

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Manitowoc reached its highest level in nearly two years yesterday, and traders are looking for even more gains.

optionMONSTER's Heat Seeker system shows that more than 2,200 April 22 calls traded in a strong buying pattern for prices between $0.31 and $0.55. The volume was 5 times the strike's open interest of 446 contracts before the session began, indicating that these are new positions.

MTW rose 3.51 percent yesterday to close at $21.25. It climbed to $21.35 with 15 minutes left to trade in the session, its highest intraday price since May 2011. Shares of the crane manufacturer are up some 30 percent since beginning the year by gapping up from below $16.

Heavy-equipment companies as a group are up more than 19 percent in the last three months, well outpacing the S&P 500, according to our researchLAB analysis tool. The sector has achieved these gains despite a steady decline by industry leader Caterpillar since the beginning of February.

Yesterday's long calls , which lock in the purchase price for the stock, are looking for MTW to gain roughly 6 percent or more by mid-April. The options can provide significant leverage if the stock rallies, but they will expire worthless of shares remain below the $22 strike price. (See our Education section)

Total option volume in the name was just shy of 6,200 contracts yesterday, more than 7 times its daily average of just 857 in the last month. Calls outpaced puts by 2.5 to 1.

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