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Bulls Return to Southwestern Energy

By David Russell, reporter at OptionMonster

NEW YORK -- For the second session in a row, the bulls targeted Southwestern Energy (SWN) on Wednesday.

OptionMonster's tracking programs detected the purchase of more than 8,000 September 43 calls for 87 cents to 90 cents. Volume was more than twice previous open interest of 3,378 from Tuesday's buying, which means that traders put even more money to work on the long side.

These calls lock in the price where shares of the natural-gas producer can be bought. Investors use the contracts to prevent stocks from running away from them at a fraction of the cost of buying the shares outright. Their relatively cheap price can also result in significant leverage on a percentage basis.

Southwestern Energy fell 1.21% to $37.57 Wednesday but is up 37% in the last year. The stock found support at its 200-day moving average early in January and February but has bounced at its 100-day more recently. That suggests a potential acceleration of its bullish uptrend.

Total option volume was 6 times greater than average in the session, with calls outnumbering puts by 23 to 1.

Russell has no positions in SWN.

Stock quotes in this article: SWN 
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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