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A New High for General Electric Company (GE) Attracts Bulls

Weekly call buyers converge on GE

by 11/15/2013 1:58 PM
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Option Brief: General Electric Company (NYSE:GE) tagged a new multi-year high of $27.30 today, as investors react to two noteworthy items on the newswires. Meanwhile, bullish options activity has accelerated on the diversified conglomerate today, with around 99,000 calls crossing the tape so far. This is a 61% increase over the intraday norm, and almost triple the number of puts exchanged. Leading the pack is the weekly 11/22 27.50-strike call, which has seen over 17,200 contracts change hands, including several mid- and large-sized blocks.

The majority of these near-the-money calls traded at the ask price, and today's volume has surpassed current open interest levels, signaling the addition of new long positions. By purchasing the contracts to open, the speculators are wagering that GE will muscle north of the strike price by the close on Nov. 22, when these weekly options expire. This denotes a rise of 0.8% from the security's current price at $27.28, as well as territory last explored in September 2008.

Technically speaking, General Electric Company (NYSE:GE) has advanced about 30% year-to-date, and has bested the broader S&P 500 Index (SPX) by 7.3 percentage points during the most recent three-month time frame. The shares also continue to trade atop their 10-day moving average, which has acted as support since early October.

Off the charts, Amphenol Corporation (NYSE:APH) today announced plans to acquire GE's Advanced Sensors Business for around $318 million. In addition, General Electric Company (NYSE:GE) said it will sell up to 20% of its consumer finance unit as an initial public offering next year.


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