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Bulls Look to Power Up With NRG Energy

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- Bulls piled into NRG Energy Thursday, looking for the power producer to test recent multi-year highs.

OptionMonster's tracking systems detected heavy buying as nearly 18,000 December 29 calls traded Thursday, led by prints of 10,000 and 4,000 that went for $1.30. These are definitely new positions, as open interest in the strike was just 442 contracts before the trades crossed our scanners.

NRG rose 0.36%, to $27.53 Thursday, ahead of the company's second-quarter results on August 9. The stock has pulled back, since peaking at $29.19 on July 19 -- its highest price since September 2009 -- but is still up some 20%, since the start of this year.

Thursday's long calls, which lock in the price where traders can buy the stock, are looking for NRG to rally back above that $29 level by mid-December. But if it stays below that strike price, the calls could expire worthless.

Our systems also found upside action in the December 28 and 30 calls Thursday. Total option volume in the name topped 26,500 in the session, nearly 10 times its daily average, with overall calls outnumbering puts by 23 to 1.

Najarian owns NRG calls.

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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