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Bulls come back to Applied Materials

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Applied Materials attracted bullish option activity on Friday for the second session in a row.

More than 8,800 April 13 calls were purchased, almost all of them for $0.13, according to optionMONSTER's Heat Seeker system. The volume was more than double the open interest in the strike before trading began, clearly showing that this is fresh buying.

AMAT rose 0.6 percent on Friday to close the week at $11.71, nearing resistance from the beginning of the year that had been in place since mid-September. The chip-equipment maker saw huge call buying at the April 12 strike in the previous session.

Friday's long calls , which lock in the price where traders can buy shares, are looking for AMAT to gain more than 12 percent by mid-April. The contracts could be sold for a profit earlier in the event of a rally before then, but they will expire worthless if the stock closes below the $13 strike price at that time. (See our Education section)

Friday's calls pushed overall option volume in AMAT to 17,890 contracts, more than 4 times its daily average. Only 575 puts traded in the entire session, a reflection of the bullish sentiment.

The company has tentatively scheduled its next earnings report for Feb. 13 and will present at the Goldman Sachs Technology & Internet Conference the next day.

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