Quanta Services, Inc. (PWR) is a construction and engineering company that provides solutions to the electric, natural gas and oil industries. The company’s stock is currently trading around $36.85 in a 52 week range of $25.26-$37.28. The stock has been strong this year with shares rallying nearly 17% year to date. The options tape has been very bullish today with large blocks of out of the money calls being bought. Earlier a trader bought 2,287 PWR Apr 36 calls for $1.25. This is a very bullish trade that also represents volume nearly 7 times the average daily option volume in PWR. With shares of PWR trading well above the Ichimoku Cloud it is likely that this trader is speculating on further upside in the stock rather than hedging a short stock position. We believe that the chart and the order flow in PWR is strong enough to justify a long position in PWR.
Trade: Buying the PWR Apr 36 Calls for $1.35
Risk: $135 per 1 lot
Reward: Unlimited
Breakeven: $37.35
James Ramelli
http://keeneonthemarket.com
