Has Housing Bottomed?

Action in Louisiana-Pacific Corp (NYSE: LPX), a manufacturer of building products, may suggest just that. This company is a manufacture of things that homebuilders need: OS board, siding, and engineered wood products and not only do they operate in North America, but also in Brazil and Chile, through affiliates.

Options action in Louisiana-Pacific Corp exploded this morning with 12,000 of the Jan 2011 $7.50 strike calls being bought on the offer in multiple, large blocks for $1.25-1.40. This purchaser came for more calls even as the stock rose. Open interest is essentially nil on that line.

Technically, the stock has been gently upgrading since bottoming in March 2009 when it was trading for little over $1, currently up 700% since then. The above action suggests that the company still has gas in the tank. Short interest has grown to 10% and the company is still losing money, so I would still be cautious on the name though.

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