It’s Time to Get LONG DGIT

Digital Generation, Inc. (DGIT) is a company engaged in the distribution of ad campaigns both online and on television.  The company’s stock is currently trading around $13.60 in a 52 week range of $5.78-$14.24. The stock performed very well last year with shares gaining just under 36% in the past 12 months. Options action in DGIT today suggests that traders believe the stock will continue this trend through September expiration. Early in the session a trader sold 2,000 DGIT Sep 15 puts for $2.77. This was labeled as an opening position and this sale of in the money puts represents some very bullish speculation.  While this may not seem like a large block this trade represents volume over 9 times the average daily option volume in DGIT. The stock is also trading well above the Ichimoku Cloud and the future cloud is upward sloping indicating the stock could have more room to the upside. We believe that the strong chart and very bullish order flow present a good opportunity for a long in DGIT with a price target north of $15.00.

Andrew Keene

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