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Trader bets on comeback in Hologic

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Hologic has been pulling back this month, but one trader is betting on a rebound.

optionMONSTER's Heat Seeker system detected the purchase of 2,000 May 20 calls yesterday, led by a print of 1,474 that went for $1.50. This is clearly a new position, as the strike's open interest was a mere 10 contracts before the session began.

The long calls , which lock in the purchase price for the stock no matter how high it might climb, are looking for HOLX to rally above $21.50 by mid-May. These options could be sold earlier at a profit if their premiums rise with a rally before then, but they can expire worthless if shares remain below the $20 strike price. (See our Education section)

HOLX rose 0.77 percent yesterday to close at $20.94 but is about 7 percent since the beginning of April. The stock dropped early in the month after its 10-day moving average fell below the 50-day line, but shares are now apparently trying to bounce at their 200-day average.

The company, which manufactures medical-diagnostic equipment, is scheduled to release its next quarterly results on May 6 after the close. The May calls expire less than two weeks later.

Yesterday's call buying made up 95 percent of the total option volume in HOLX. Only 2 puts traded in the session, a reflection of the day's bullish sentiment.

Earlier this month Hologic saw call buying and put selling on different days, trades that are both positive on the stock.

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