Dana Holding Corporation (DAN) provides driveline and thermal management products for vehicle manufacturers. The company’s stock is currently trading around $19.40 in a 52 week range of $12.70-$23.46. The stock has been performing well this year adding more than 24% to share prices year to date. Unusual action in DAN options during today’s trading session indicates there could be further upside in store for DAN. Earlier in today’s session a trader bought 2,288 DAN Jun 19 Calls for $2.15. This is nearly a $500,000 bet on DAN rallying through June expiration and shows this traders relatively high level of bullish conviction in DAN. Technically speaking the stock has been trading in bearish territory, according to the Ichimoku Cloud, since they reported their last quarterly earnings results on October 28th, but we believe this order is significant enough to serve as a signal for a long swing trade in DAN. We will use the Ichimoku Cloud to help set stops and targets.
Trade: Buying DAN Stock at $19.40 with a stop at $18.50
Risk: $0.90 per share
Target #1: $19.85
Target #2: $20.25
Target #3: $21.05