This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bulls Target Emerson Electric

By David Russell, reporter at OptionMonster

NEW YORK -- Industrials have been strong, and now the bulls are targeting Emerson Electric (EMR) .

OptionMonster's trade scanners detected the purchase of 3,300 August 60 calls for 30 cents shortly after the opening bell on Friday. Almost 4,300 of those contracts would eventually trade, more than five times the previous open interest in that strike.

These calls lock in the price where the stock can be bought, providing an inexpensive way to profit from a rally without buying shares directly. The options can generate huge leverage from even a small move in the underlying stock but can expire worthless if it doesn't move in the next month.

Emerson was trading for about $57.88 when the calls hit, and it closed at the session high of $58.80 for a gain of 1.84%. But that return percentage paled next to the performance of the August 60 calls, which almost doubled to 55 cents.

The stock peaked around $60 in May, pulled back its 200-day moving average in June, and is now finding support above its 50-day moving average. That could be leading some chart watchers to believe that it will continue to rally.

Industrials have been popular in the last week, delivering roughly triple the performance of the S&P 500 over that period. Emerson will announce quarterly results before the opening bell on Aug. 6.

Overall option volume was six times greater than average in the session, with calls accounting for a bullish three-quarters of the total.

Russell has no positions in EMR.

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.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $79.19 0.00%
GOOG $532.11 0.00%
TSLA $250.80 0.00%
YHOO $42.94 0.00%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports