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By Mike Yamamoto

J.C. Penney (NYSE:JCP) has barely moved in the last week but continues to draw upside option activity today.

JCP Chart

More than 10,000 calls have traded at the April 35 strike at nine times the open interest, dwarfing the average call volume of just 68 per day for the last month. Most of the calls were bought for $0.15 to $0.20, including a single block of 5,000.

The department-store chain is down 1 percent to $32.76 this afternoon, its fourth straight session of trading between about $32.50 and $33. JCP has been taking a breather for the last week since running from below $26 after reporting bullish earnings expectations for 2010. The next possible resistance level is around $37, the 52-high from October.

For the calls purchased today to turn a profit, the stock would need to gain at least some 6.8 percent by expiration in mid-April. Overall calls at all strikes are outpacing puts by more than 1,000 to 1.

The company will release its March sales report on April 7 and will hold an analyst meeting on April 19. J.C. Penney is scheduled to release its next earnings report on May 13.

(Chart courtesy of tradeMONSTER)

Source: Traders Staying Bullish on J.C. Penney