Bulls Stampeding into Dress Barn

| About: Ascena Retail (ASNA)
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By David Russell

The bulls are stampeding into Dress Barn (DBRN) today, snapping up shares and calls in the heavily shorted retailer.

Most of the activity focused on the December 20 calls and the November 20 calls. The December strikes traded 2,064 times against open interest of 402 contracts, with most of the volume pricing for $1.25 to $1.35, according to optionMONSTER's Heat Seeker tracking program.

DBRN Chart

DBRN rose 2.87 percent to $19.91 in morning trading and is up 35 percent in the last month. About a quarter of the company's traded shares were sold short as of Sept. 25.

The company's fiscal fourth-quarter earnings beat analysts' forecasts when it last reported on Sept. 16, though revenue for the period and outlook for 2010 both missed estimates.

The shares need to climb another 7 percent by expiration for the December calls to turn a profit.

Other investors purchased the November 20 strikes, mostly paying $0.85 to $0.90. Our systems showed 1,655 contracts changing hands against open interest of 1,182.

Overall options volume in the name was six times greater than average, with calls exceeding puts by almost 9 to 1.

(Chart courtesy of tradeMONSTER)