AWC...to $1.65?

by Raymond Chan

The last time we saw AWC had a good rally was early Oct where it rose in a few days from $1.30ish to $1.65 and call options during those few days were heavily traded.

On Friday last week, 4 November 2011, we saw relatively large quantity of calls went through on AWC again, almost 3 times the day before and about twice the daily average for the week (14,000 contracts vs daily average of about 7,000). However, despite the high call volume on Friday, on a weekly basis, its overall volume is still lower than the week before.
 
As AWC rose 5.3% on Friday 4 Nov 11, the question is, is this a repeat of its early October pattern, strong rise in a few days?

Well, putting its call actions in perspective of its historical pattern, the long call trading in AWC on Friday seems to lack conviction. Its likely that it will either fall below $1.50 and try for the $1.65 again or struggle along the way to get there. More likely former.

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