By Pete Najarian, co-founder of OptionMonster

NEW YORK ( OptionMonster) -- The charts look terrible in the tanker and bulk-shipping sector, but analysts believe that Frontline ( FRO) has promise. And Thursday it got a boost from option activity as well.

The February contracts were squarely in the sights of the bulls, with the 30 calls and the 27.50 calls trading more than 5,900 contracts between the two of them. The February 30s priced for 10 cents, so they were definitely cheap bets hoping for a big jump. The February 27.50s traded for 20 cents to 30 cents, according to OptionMonster's real-time tracking systems.

There was also buying in the March 30s for 25 cents and the February 29s for 15 cents to 20 cents, though volume was below open interest in the latter strike. By the time the session ended, total volume was about 7 times more than Frontline's daily average. Calls accounted for more than 90% of the activity, a further bullish sign.

The stock fell 0.16% to $25.18 Thursday as it continued its downtrend since June, when it traded for over $36. The first technical challenge will be the 50-day moving average around $26, and then it faces the 200-day line between $29 and $30.

The research paints a prettier picture. Deutsche Bank upgraded the stock to buy from hold this week and assigned a $32 target price over the 12 months. And Jefferies has said the company has the greatest upside potential in the energy space in 2011.

Judging by the option activity Thursday, some traders are apparently looking for the stock to catch a wave or two of that mojo in the next few weeks.

Najarian has no positions in FRO.
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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