Wall street traders are allocating capital to Southern Company (SO), an electric utilities energy conglomerate based in Georgia. SO is up over a dollar today and trading fairly in the middle of its 52-week range of $40.03-$46.81. Even still, a lot of long calls are coming across the tape from Wall Street.

SO has been trading in a bearish pattern this week and broke to the upside on the open this morning. Institutional order flow has been refocusing on the electricity and utility sectors, which may indicate a possible merger in the space. This speculation is likely what broke the trend for SO and has many investors now holding long positions. Bullish signals are coming from the intraday chart with SO trading well above the cloud on the fifteen-minute bar, and testing resistance on the daily chart. If Southern continues to find buyers and break resistance to the upside in the coming days, it could potentially make new highs.

Fairchild Semiconductor International, Inc (FCS) saw some bullish action today as the stock makes new highs. FCS opened today at $15.72 and hit its 52-week high of $16.12 this morning before pulling back to $15.86 where it stands now. Even this slight pullback could be seen as a buying opportunity as the new high was made on volume that has already eclipsed its average daily volume, suggesting the only way to go is up, which is a familiar direction for FCS as it has more than doubled the returns of the S&P YTD, up 18.22%.

Technically, FCS looks very strong. The stock broke through decidedly bearish resistance a couple weeks ago on news of a new product launch that tested well above industry competition and may have set a new standard for energy efficiency modules. After breaking through resistance to the upside, the stock continued its parabolic rally as investors piled on board and didn’t find sellers until today. The forward projection of the Ichimoku cloud is signaling a continued rally after this intraday pullback.

The Trade: Buying the FCS Aug 17 Calls for $.45

Risk: $45 per 1 lot

Targets: Sell 25% at $.55, Sell 25% at $.65, Sell 25% at $.80, Sell 25% at $1.00

Greeks of this Trade:

Delta: Long

Gamma: Long

Theta: Short

Vega: Long

Mcgraw Hill Financial, Inc (MHFI) is a financial intelligence and research firm that gets paid for ratings of S&P companies as well as general market research and for providing economic data. We have seen some bullish activity come across the tape in this name today. MHFI has tested new highs recently as it continues its yearlong bull run. It hit its 52-week low almost a year ago at $52.68 and spiked to $84.81 yesterday, representing its 52-week high.

This is a standard growth stock that has only had one major pullback below the cloud in the past year. This was relatively short and MHFI rallied back to where it is now, trading well above the cloud and up almost 8% YTD.

The intraday chart is sending slightly bearish signals, however we can expect the long term trend to continue so this may be a good buying opportunity as that is what we can see from the order flow coming across the tape today.

The Trade

Buy Jul 85 Calls for 1.30

Risk: $130 per 1 lot

Reward: Unlimited

Breakeven: $86.30

The Greeks

Delta: Long

Gamma: Long

Theta: Short

Vega: Long

Orbitz Worldwide, Inc. (OWW) is showing a long setup Friday morning, three days after its annual shareholders meeting that voted on new board members. That shouldn’t act as a huge catalyst for movement. However, we are seeing unusual option activity coming across the tape, as institutional investors are getting long.

Orbitz is a worldwide travel agency that is well known for its advertising campaigns and promises of low prices. Recently, they started an initiative called Orbitz Original which partners with local tourism agencies to showcase all that a given country has to offer with respect to tourism. Recent destinations have included Ireland and Puerto Rico. This is a great new marketing strategy that not only highlights what Orbitz can do to help its customers and all of the insight the company has, but it is also mutually beneficial as it allows countries to showcase their attractions and spur tourism through the online video series. Perhaps moves like this are why people are getting long the travel agency, which has performed almost a point and a half better than the rest of its industry, up 13.5% YTD.

The daily chart is signaling a possible reversal from its recent selloff as it has broken resistance and is trading inside the Ichimoku cloud and testing more upside resistance. Intraday, OWW is trading well above the cloud even with a relatively flat trading day. These are all bullish signals, so let’s look at a trade.

The Trade

Buy Nov 10 calls for .65

Risk: $65 per 1 lot

Reward: Unlimited

Breakeven: $10.65

The Greeks

Delta: Long

Gamma: Long

Theta: Short

Vega: Long

Some bullish activity came across the tape today in BJK, the MarketVectors Gaming ETF, which is a fund comprised of companies that earn more than half their revenue in the gaming industry. This includes casinos, lottery services, racetracks, online sports betting and more. Perhaps some investors see opportunity for growth in the short term with the World Cup approaching and gambling increasing.

BJK is trading in the middle of its 52-week range and gapped up the better half of a dollar overnight and continued to rise this morning with strong volume. A bearish trend can be confirmed by looking at the chart, which shows a break above strong resistance this morning and a climb to well above the cloud, coupled with higher than usual volume.

Let’s take a look at a trade.
The Trade: Buying the BJK July 49-50 Bull Call Spread for $.35 debit

Risk:  $35 per 1 lot

Reward: $65 per 1 lot

Greeks of this Trade:

Delta: Long

Gamma; Long

Theta: Short

Vega: Long

Devon Energy Corporation (DVN) is involved in the exploration and development of oil, natural gas and NGL’s. The stock is a consensus “Buy/Hold” on Wall Street after strong sessions Tuesday and so far Wednesday and has received high price targets from a lot of banks. The stock is still seemingly a value play trading fewer times earnings than industry counterparts and the market as a whole. That combined with 4x usual volume and making new highs would suggest a continued rally.

Management seems to be performing well after making moves to refocus efforts and funds on domestic development, selling off international assets. This is a play on the likely expansion of US energy production. The sector has been leading the market and Devon has been leading the sector this year, so it’s easy to see why traders are long DVN.

Devon looks great on the cloud chart as well, breaking through strong resistance this morning to the upside and continuing to push higher.

The Trade: Buying the DVN July 82.5 Calls for $.33

Targets: Sell 20% at $.43, Sell 20% at $.53, Sell 20% at $.65, Sell 20% at $.80, Sell 20% at $1.00

Greeks of this Trade:

Delta: Long

Gamma; Long

Theta: Short

Vega: Long