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By David Russell

Panera Bread (NASDAQ:PNRA) broke through key resistance at $75 on Friday, and now traders are looking for a continued run higher.

optionMONSTER's Heat Seeker tracking system detected heavy buying of the March 80 calls for $0.35 to $0.80, with premiums rising along with the stock as the session progressed. Nearly 5,700 contracts changed hands, more than 11 times open interest in the strike.
PNRA Chart

PNRA rose 5.4 percent to an all-time high of $78.04. The restaurant operator gapped higher on Jan. 20 after pre-announcing strong fourth-quarter earnings amid accelerating same-store sales.

The news caused the shares to gap higher the next day, but they remained trapped below the $75 level where they had formed a "head-and-shoulders reversal" pattern in the first half of 2006. Now that they have broken that level, chart watchers may expect continued gains.

Short interest represented 14 percent of the float in PNRA as of Feb. 12, so forced buying could be contributing to the rally. Some of the call activity might also result from hedging by bears.

PNRA must rally another 4 percent for the March calls to turn a profit.

Capital also flowed into the April 80 calls, which mostly traded for $1.40 to $1.70. Some 1,075 contracts changed hands against open interest of 627.

Overall options volume in PNRA was 11 times greater than average. Calls accounted for 79 percent of the activity, according to Heat Seeker.

Disclosure: No positions