Bullish Activity in MUR

I noticed some bullish activity in MUR today. The thing that caught my eye was the fact that investors are going after the out of the money calls on MUR for the front month. The may 60 calls were purchased between .25 and .35 per contract. With 10 days left and 9 after tonight, these call buyers are looking for some movement to come quickly in this name. The strike does have a Delta of .16 which would be about a 50% gainer if the stock moves up $1.00. The Implied Volatility is fairly priced when compared to the Historical Volatility. The stock needs to close above $60.25 to $60.35 depending on what the premium paid was. If the position is held to expiration the investor will need the stock to move up 8.2% or $4.57 from today's close price of $55.78.

MUR Option Chain, provided by TOS



There was also some action that crossed the tape on the Jun strikes. I like the fact that the IV is below the HV here, so the option is not juiced yet. I will keep an eye on this position and look to possibly enter the Jun 60 call @ 0.90 to 0.95. With a Delta of .26 and a favorable IV to the buyer.

MUR Trade Break Down, provided by Livevol



MUR Option Action, provided by Livevol




MUR reported EPS on 5/5/10 and missed estimates coming in at 0.77 vs. 0.99, this started the selling and then Thursdays and Fridays action continued to push down.
This might be a case of bottom fishing or maybe something else brewing here. At any rate the daily looks like it is setting up for an Inverse H&S pattern which could push MUR back up to the $60.00 area, it will have to contend with the 50 and 200 MA and also the action in the Crude market but I feel it is one to keep on your watch list.

I also like the fact that Crude appears to be at a good area of support. The daily on the crude can be classified as a bear flag and might find further weakness to the 70 level. If that happens and I am in the position more than likely I will get stopped out. I will keep this in mind and see if we get a lift in Crude, also keep in mind how the U.S Dollar trades as it should affect Crude. If the dollar pulls back a bit we can see Crude find a bid.

MUR daily Chart, provided by TOS



I will update if I enter a position in this name.