Traders Take Bullish Positions in Tiffany

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

Chris McKhann, an analyst at OptionMonster.

Shares of Tiffany(TIF Quote) declined slightly yesterday, but options activity was bullish ahead of the luxury jeweler's earnings report this morning.

OptionMonster's tracking systems show 3,700 of the June 28 calls sold for $1.45 to $1.85. This action is above open interest, indicating fresh buying.

Yesterday's trading showed bullish sales of June 25 puts as well, with more than 2,700 changing hands at that strike. This is less than open interest but had a strong selling pattern.

Before the opening bell today, Tiffany reported that first-quarter earnings fell 62% from the same period a year ago but still met analysts' estimates. Revenues fell short of projections, but the company reaffirmed its guidance for all of 2009.

TIF closed at $28.13 yesterday, off 0.27%. The shares dropped further in pre-market trading after this morning's earnings results, to $27.53.

The stock has been on the run since bottoming out in early March, when the price was as low as $16.70. There is overhead resistance around $30 and still a long way to go before shares can get back up to year-ago levels when the stock was just shy of $50.