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Freescale bulls look for more upside

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Freescale Semiconductor spiked higher yesterday after reporting strong quarterly numbers, and traders are looking for more gains.

More than 5,000 June 15 calls were purchased in less than a minute yesterday morning, led by two blocks of 2,000 that went for $1.40 and $1.45, optionMONSTER's Heat Seeker system shows. This is fresh buying, as there was no open interest in the strike before the session began.

FSL surged 14.85 percent to $14.23 yesterday on stock volume that was about 7 times higher than average. Freescale, which makes chip technology for remote controls and other wireless systems, beat forecasts on the top and bottom lines in its fourth-quarter report after Tuesday's close. Pacific Crest raised its price target to $15 from $11 while maintaining an "outperform" rating on the name.

Friday's long calls , which lock in the price where traders can buy stock, are looking for FSL to gain more than 15 percent by mid-June. These options could be sold earlier at a profit if premiums rise with any rally before then, but the contracts will expire wortheless if shares don't reach the $15 strike price. (See our Education section)

Total option volume in the name surpassed 10,000 contracts yesterday, 7 times its daily average of 1,462 in the last month. Calls at all strikes outnumbered puts by more than 17 to 1, a reflection of the session's bullish sentiment.

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