Option activity ramped up on Cree, Inc. (NASDAQ:CREE - 34.45) yesterday, with overall volume rising to 16,000 contracts -- more than double the norm. The day's most active strike was CREE's January 2013 36-strike call, where 2,373 contracts were traded. About 82% of these calls crossed the tape closer to the ask price, suggesting they were purchased, and open interest climbed overnight by 1,856 contracts. In other words, it looks like speculative players on Tuesday bought to open a new batch of January 36 calls on the tech stock.

Those out-of-the-money calls traded at a volume-weighted average price (VWAP) of $1.28. Based on this cost of entry, the stock would need to rise above breakeven at $37.28 prior to January expiration for call buyers to make a profit. CREE closed Tuesday at $34.69, so these calls are out of the money by several points.

Options traders have taken an increasingly bullish tack with the LED specialist of late, as evidenced by the stock's 10-day call/put volume ratio of 6.29 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks higher than 84% of other such readings taken over the past year, pointing to a stronger-than-usual preference for calls over puts.

CREE has turned in a solid technical performance in 2012, having gained more than 57% year-to-date. The stock has recently been trekking higher along the support of its 10-day and 20-day moving averages, but the looming $35 level could pose a short-term challenge. CREE hit a new 52-week high at $35 just yesterday, so this area may emerge as a layer of psychological resistance going forward.