OPTIONS SURGE: Hartford Financial (HIG, PRU, LNC)

Posted in Options 
August 6th, 2009

Hartford Financial Services Group Inc. (NYSE: HIG) is trading massive call volume with more than 35,000 August calls trading including 20,800 out of the money August $20 calls and even 2,900 August $22.50 calls with shares ate $18.40.  HIG is showing notable strength up 11% today while other insurers like Prudential (NYSE: PRU) and Lincoln National (NYSE: LNC) trade lower.  The $18 mark was a key technical breakout level and shares are now running into 200 day EMA resistance at $18.85.  A break through that level could spark a massive move on an ascending triangle break, with an implied move to $30 by early next year.  Hartford Financial currently trades just 2.1X cash value and 0.4x book value.  Shares are rising today after raising $900M in an equity offering, seeing very strong demand, making a bullish case for the future prospects of the company.  Hartford has major exposure to retirement products, so the recent market strength should contribute to much better quarters ahead.  11:10 AM EST

-JOE KUNKLE, OptionsHawk.com

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