By Mike Yamamoto
Tata Motors (TTM) shot higher on a strong earnings report Friday and drew upside option activity along the way.
The India-based automaker gapped higher at the open and closed at $26.40, up 9 percent on the day. TTM had been in a steady downtrend since falling sharply in late November but has bounced off its 200-day average (purple line on chart), which has served as support since the end of last month.
optionMONSTER's Heat Seeker system shows that more than 2,800 March 28 calls traded in a strong buying pattern at more than 10 times the previous open interest of 262 contracts. The premiums ranged from $0.75 to $0.95.
For the calls bought Friday to turn a profit, TTM needs to gain roughly 9 percent before they expire on March 18. Overall calls in the name outnumbered puts by nearly 4 to 1.
(Chart courtesy of tradeMONSTER)