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TheStreet Open House

ADC Telecom Call Buyers See Long Run

Stocks in this article: ADCT

By David Russell, reporter at OptionMonster

EDEN PRAIRIE, Minn. ( TheStreet) -- ADC Telecommunications (ADCT) is breaking out and the bulls are looking for a prolonged run.

OptionMonster's tracking systems detected unusual buying in the January 10 calls, which traded 7,080 times for 45 cents to 65 cents. Volume was almost six times open interest in the strike.

The maker of broadband equipment rose 4.99% to $8.21 Tuesday and is up 14% in the last month. The stock gapped higher after issuing better-than-expected earnings on Feb. 9. (It's also been favorably mentioned by Jim Cramer.)

ADC spent most of March consolidating between $7 and $7.50 and then started rallying despite bearish options activity late last month.

Tuesday's call buyers are looking for shares to rally past $10 by January expiration and may be hoping for the stock to fill a bearish price gap that occurred on July 23, 2008. Traders may also expect the company to announce positive earnings when it reports May 5.

Overall option volume in the name was 20 times greater than average in the session, and calls accounted for 96% of the activity.

At the time of publication, Russell had no positions in the stock mentioned.

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