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Bulls bet Titan will shift into high gear

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Titan International has lost about a third of its value in the last seven months, but traders are betting on a rebound.

More than 2,000 January 22.50 calls traded in a strong buying pattern yesterday, almost all of them going for $0.25 and $0.30, optionMONSTER's Heat Seeker scanner shows. The volume was more than 6 times the strike's open interest of 315 contracts at the beginning of the day, indicating new activity.

TWI rose 6.61 yesterday to close at $20.33 as the beaten-down stock showed some increasingly positive technical signs. The tire and wheel manufacturer has been trending lower since its 52-week high just under $30 reached in early May, but the stock saw its 10-day moving average rise through its 50-day moving average on Wednesday in a potentially bullish signal.

Yesterday's long calls , which lock in the price where traders can buy shares, are looking for TWI to gain roughly 12 percent by the close on Dec. 21. The options will expire worthless if the stock is below the $22.50 strike price at that time. (See our Education section)

Overall option volume in the name was more than 15 times its daily average. Only 24 puts traded in the entire session, a reflection of the bullish sentiment.

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