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Union Pacific Corporation (UNP) hit a new 52-week high of $75.89 on Friday. Following this news, option activity on the railroad concern was brisk, with roughly 21,000 contracts traded.

Calls on UNP were especially popular, with some 17,000 of these bullishly biased contracts changing hands -- nearly four times the stock's usual call volume of just 4,306.

Option players showed a particular preference for the out-of-the-money May 80 call, which saw volume of 15,273 contracts cross the tape. Over the weekend, 12,696 contracts were added at this strike, confirming the addition of fresh positions.

In fact, the bulk of this activity can be attributed to one trade. Early Friday morning, six blocks totaling 13,730 May 80 calls traded at or near the ask price, suggesting they were bought. With UNP currently trading around $74.76, these calls are more than five points out of the money.

Technically speaking, UNP has not breached the round-number $80 level since September 2008. However, since March 2009, the stock has been trending steadily higher, forming a series of higher highs and higher lows. UNP is currently hovering well above the support of its long-term 10-month and 20-month trendlines.

However, there are signs that UNP may be running out of steam. The stock's Relative Strength Index of 75 is in "overbought" territory. Furthermore, with just 1.52% of the equity's float tied up in short interest, there is little sideline money to help fuel UNP higher on the charts.


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