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By Pete Najarian

St. Jude Medical (NYSE:STJ) lit up our screens with upside option activity Tuesday even though it acknowledged a day earlier that the weak economy is threatening its goals.

STJ ChartTrading was hopping right out of the gate on optionMONSTER's HeatSeeker system, which showed immediate buying of the February 40 calls for $0.65 and $0.70. By the end of the day more than 8,700 calls had traded at the strike, more than double the open interest, at prices as high as $0.95.

Average call volume for the cardiovascular device maker is just 187 per day in those contracts and 732 at all strikes combined. Overall calls in the name, which totaled 10,845, outnumbered puts by roughly 8 to 1.

STJ closed at $38.13, up 0.16 percent on the session. The stock stopped just above the level of all three moving averages and may be at a level of support.

The stock would need to gain roughly 7 percent by the February option expiration for the calls purchased yesterday to turn a profit.

Shares are trading back up at levels last seen in early October before the company reported third-quarter sales numbers that missed expectations. On the day after that release, Oct. 6, STJ gapped lower by about 15 percent to $32.70 from its previous close of $38.24.

On Monday St. Jude said it expects double-digit earnings growth this year but acknowledged that health care reform and economic weakness threatened its 15 percent goal. The company made its remarks in advance of its full earnings report scheduled for Jan. 27.

Disclosures: I own STJ calls.

(A version of this post appeared on InsideOptions Tuesday. Chart courtesy of tradeMONSTER.)