Clothing manufacturer V.F. Corporation (VFC) is up 30% over the past year, with most of that gain occurring over the past few months. One trader sees shares trending higher over the coming weeks.
That’s based on the November 1 $21 calls. With 17 days until expiration, 21,147 contracts traded compared to a prior open interest of 172, for a hefty 123-fold rise in volume on the trade. The buyer of the calls paid $1.05 to make the bullish bet.
V.F. Corporation shares recently traded for about $20.30, so shares would need to rally by $0.70, or just over 3%, in the next two weeks and change. The strike price is also right at the stock’s 52-week high of $21.40.
That high was hit recently and shares have pulled back a bit. Given the bullish uptrend, it’s likely that there will be a retest of that $21 high in the coming trading sessions.
Action to take: Momentum investors may like shares here as a multi-month trade. V.F. has cut its dividend in the past, but still pays a 1.8% yield on top of any momentum-based gains it may see over the next few months.
For traders, the November 1 $21 calls can likely see mid-double-digit returns, given the time left on the trade. Less aggressive traders may want to look further out to play the current multi-month uptrend in V.F. shares.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.