Pier 1 Imports Draws Bullish Shoppers

By Pete Najarian, co-founder of OptionMonster

FORT WORTH, Texas ( TheStreet) -- I haven't seen a Pier 1 Imports ( PIR) store for years and have never been in one, but the stock made its way onto my radar screen Wednesday.

The home-furnishings retailer dipped early, then came off the lows and started rallying, with more than 2,500 February 10 calls trading in a strong buying pattern, going for 40 cents to 45 cents in a few sizable blocks, according OptionMonster's real-time tracking systems.

Pier 1 ended the session up 4.49% to $10. The stock has rebounded from a drop earlier in January that brought it near its 100-day moving average, though the 50-day line is still looming overhead.

For the calls bought Wednesday to turn a profit, the stock would need to gain roughly 4.5% before they expire on Feb. 18.

Short interest was around 11% at the end of December, so the squeeze factor does play into the move. The company had a good run up to the holidays, with strong earnings and revenue in the quarter that ended Nov. 27.

Volume wasn't huge Wednesday -- some 2,669 contracts -- but that was still 32 times greater than average. Calls also accounted for more than 99% of the activity, another bullish indication.

Najarian has no positions in PIR.

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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