Market Overview

Is Fiserv Headed To New Highs?

Shares of Fiserv (NASDAQ: FISV) are trading lower on the session by 0.77%, at $63.36. The stock hit an intra-day high of $64.37 before pulling back; this appears to be some profit taking before the company reports Q4 earnings. FISV will report before the bell tomorrow.

While today's action looks bearish in isolation, one option trader is betting that shares beat estimates, regain today's losses, and push to a fresh 52-week high. A short while ago the March 2012 $65.00 call was bought, on the offer, for $1.30. This transaction is new long positioning in the name, given the current open interest on the strike (771).

Fiserv has been ticking higher and higher for the past three months. After bouncing off of the $53.91 level in late-November, FISV has been off to the races, consolidating and breaking out consistently.

Shares are trading well above the 20-day and 50-day moving averages, but have been consolidating around between $62.50 and $64.00 for the past two weeks. With the 52-week high not far above, at $65.41, you have to think shares will catch a lot of momentum on a better than expected number tomorrow.

Given the implied volatility on the March $65 call, 22%, as well as current overall implied (23%) and historical vol (12%), getting long the strike is not a terribly expensive way to play the name.

Fiserv, Inc. is a global provider of financial services technology solutions, including electronic commerce systems and services, such as transaction processing, electronic bill payment and presentment, business process outsourcing, document distribution services, and software and systems solutions.

Posted-In: Long Ideas Technicals Options Markets Trading Ideas

 

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